news4global
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • VideosHot
    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    Terra Luna News Today | Rajeev Anand | Crypto News Today | Cryptocurrency News Today | Crypto Marg

    Terra Luna News Today | Rajeev Anand | Crypto News Today | Cryptocurrency News Today | Crypto Marg

    Luna Big News – 30B Terra  Luna burned in 1 hour | 100X Profit Next 48 Hours | Luna Crypto Luna Coin

    Luna Big News – 30B Terra Luna burned in 1 hour | 100X Profit Next 48 Hours | Luna Crypto Luna Coin

    Poilievre's position on cryptocurrency criticized | CPC leadership debate

    Poilievre's position on cryptocurrency criticized | CPC leadership debate

    CRYPTO IS BLOODY RIGHT NOW! IS CRYPTO CRASHING? ARE WE IN THE MIDDLE OF A CRYPTO CRASH?!

    CRYPTO IS BLOODY RIGHT NOW! IS CRYPTO CRASHING? ARE WE IN THE MIDDLE OF A CRYPTO CRASH?!

    Why Terra Luna Dump hard ? | Reason..

    Why Terra Luna Dump hard ? | Reason..

    BITCOIN HOLDERS…WHAT PRESIDENT BIDEN SAID ABOUT INFLATION

    BITCOIN HOLDERS…WHAT PRESIDENT BIDEN SAID ABOUT INFLATION

    Michael Saylor Reacts To Bitcoin Crash And Inflation

    Michael Saylor Reacts To Bitcoin Crash And Inflation

    Is LUNA Fueling the Crypto Crash?

    Is LUNA Fueling the Crypto Crash?

No Result
View All Result
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • VideosHot
    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    Terra Luna News Today | Rajeev Anand | Crypto News Today | Cryptocurrency News Today | Crypto Marg

    Terra Luna News Today | Rajeev Anand | Crypto News Today | Cryptocurrency News Today | Crypto Marg

    Luna Big News – 30B Terra  Luna burned in 1 hour | 100X Profit Next 48 Hours | Luna Crypto Luna Coin

    Luna Big News – 30B Terra Luna burned in 1 hour | 100X Profit Next 48 Hours | Luna Crypto Luna Coin

    Poilievre's position on cryptocurrency criticized | CPC leadership debate

    Poilievre's position on cryptocurrency criticized | CPC leadership debate

    CRYPTO IS BLOODY RIGHT NOW! IS CRYPTO CRASHING? ARE WE IN THE MIDDLE OF A CRYPTO CRASH?!

    CRYPTO IS BLOODY RIGHT NOW! IS CRYPTO CRASHING? ARE WE IN THE MIDDLE OF A CRYPTO CRASH?!

    Why Terra Luna Dump hard ? | Reason..

    Why Terra Luna Dump hard ? | Reason..

    BITCOIN HOLDERS…WHAT PRESIDENT BIDEN SAID ABOUT INFLATION

    BITCOIN HOLDERS…WHAT PRESIDENT BIDEN SAID ABOUT INFLATION

    Michael Saylor Reacts To Bitcoin Crash And Inflation

    Michael Saylor Reacts To Bitcoin Crash And Inflation

    Is LUNA Fueling the Crypto Crash?

    Is LUNA Fueling the Crypto Crash?

No Result
View All Result
news4global
No Result
View All Result
Home Market

QuadrigaCX Continues Providing Lessons For Crypto Investors

April 9, 2022
Reading Time: 4 mins read
0
QuadrigaCX Continues Providing Lessons For Crypto Investors
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Getty


getty

Streaming services might not be the obvious place to start conducting research about cryptoassets and crypto exchanges, but that would be an incomplete view. The recent release of a Netflix original documentary centering around the saga and intrigue that continue to surround QuadrgiaCX has reignited discussion around this topic. As institutional adoption of cryptoassets continues to accelerate, nation-states are actively allocating people and resources to developing sovereign backed crypto, and investors become more comfortable with crypto, QuadrigaCX should continue to be viewed as a cautionary tale.

Investors are no strangers to volatility, and crypto has definitely had its fair share of volatility and headline-driven themes during the last several years. Especially as newer iterations of cryptoassets create complicated and intriguing headlines from tax, valuation, reporting, and custodial perspectives, it can be easy to overlook the fundamentals that underpin this trillion dollar asset class. Non-fungible tokens have achieved sky-high valuations, and decentralized finance continues to deliver outsized returns to investors while also bringing increasing amounts of scrutiny from regulators.

Related articles

In wake of crash, cryptocurrency regulation focus heightens

In wake of crash, cryptocurrency regulation focus heightens

May 20, 2022
War on digital payment fails to hit target – Breakingviews

War on digital payment fails to hit target – Breakingviews

May 20, 2022

In other words, as crypto continues to mature, become more complicated, and debut flashier applications, investors at all levels should remember the valuable lessons taught through the failure of QuadrigaCX. Let’s take a look at a few of them.

Crypto is not autonomous. Much heralded as the decentralized aspects of cryptoassets are, and rightly so, there is an unavoidable element in the vast majority of projects, products, and services; they are developed and managed by people. This is especially true for the more centralized exchanges and cryptoassets, which are also the applications that tend to be easier for retail investors to utilize. Stated another way, even if there is no sign of human influence or interaction on the crypto products themselves, or the advertising of these products, there are almost always people involved.

Performing research on the management team of an organization is just as important as researching the specific product itself. Highlighted in the many revelations that surfaced as QuadrigaCX unraveled following the passing its co-founder and CEO, this singular individual exercised far too much control over the back-office components of the organization. Automation and reducing the need for human touchpoints creates tremendous promise, but must be counterbalanced with policies to prevent abuse.

No matter what the background of a certain individual is, questionable or not, there is always a need for strong internal controls.

Internal controls matter. Moving fast and breaking things might be the motto that many technology-themed startups have embraced, but this should be balanced against the reality that handling custodial funds must change this mindset. With approximately $150-200 million lost in what turned out to be a blatant fraud and Ponzi scheme, the lack of internal controls – highlighted at QuadrigaCX – is an issue that has cropped up as the leading cause behind other crypto hacks. Admittedly never the hottest topic or most exciting part of the crypto conversation, focusing on internal controls – especially when customer funds are involved – is essential.

For example, it would seem reasonable to expect that any organization handling customer funds and offering custodial services – fiat or crypto denominated – to have a robust system of controls over who has access to funds, how trading activity is reconciled, and how records are audited. As individuals and institutions continue to treat crypto like an asset class, and various cryptoassets are allocated to portfolio positions, it makes perfect sense that internal controls should keep pace.

Investors might look back on QuadrigaCX as an out-of-date example, but given the rapid growth of the DeFi and NFT sector, are investors truly confident that every exchange handling millions or billions in transactions has controls that are up to par?

Equivalent regulation makes sense. All of this leads to the following point; if crypto exchanges and crypto organizations are seeking to offer products and services mirroring those of incumbent organizations, the regulations must also be equivalent. For all of the talk about how blockchain and cryptoassets will revolutionize the global payments and financial system – which it will change significantly – there need to be safeguards for investors of all sizes.

In just the past two years there have been dozens of hacks, with billions of losses accrued by investors, and many of these investors are retail individuals who are left without many ways to recoup these losses. Alongside these hacks and breaches, and subsequent scrutiny from regulators, some in the cryptoasset sector are pushing back with arguments stating that new regulatory paradigms are needed.

That may very well be so, but if organizations are handling customer funds, holding customer funds, and conducting transactions on behalf of these customers, these organizations must be held to the highest possible market standard.

The saga, scandal, and controversy around QuadrigaCX is both a tale from the earlier days of crypto, and also a warning for newer investors to the space. While crypto trading has certainly become more mainstream, with publicly regulated and audited organizations dominating large swaths of the space, many emergent areas have regulators playing catch-up. Something that investors should always keep in mind is that, no matter how innovative or creative a certain product, service, or organization may be, internal controls and investor protection always matter.

Share76Tweet47

Related Posts

In wake of crash, cryptocurrency regulation focus heightens

In wake of crash, cryptocurrency regulation focus heightens

by admin
May 20, 2022
0

Experts are expecting regulatory scrutiny to increase around the cryptocurrency market following the recent crash of a multibillion-dollar stablecoin,...

War on digital payment fails to hit target – Breakingviews

War on digital payment fails to hit target – Breakingviews

by admin
May 20, 2022
0

Review: War on digital payment fails to hit target – Breakingviews ⚠ Breakingviews.com requires the use of cookies. Please enable...

The Goldilocks crisis may have arrived for crypto

The Goldilocks crisis may have arrived for crypto

by admin
May 19, 2022
0

Sixteen years ago I often joked that what the financial system needed was a “Goldilocks crisis” — a shock that...

The flip side of the coin: Why crypto is catnip for criminals

The flip side of the coin: Why crypto is catnip for criminals

by admin
May 19, 2022
0

Cybercriminals continue to mine for opportunities in the crypto space – here’s what you should know about coin-mining hacks and...

At the first UFO hearing in 50 years, the Pentagon says unexplained reports are way up

At the first UFO hearing in 50 years, the Pentagon says unexplained reports are way up

by admin
May 17, 2022
0

An unusual hearing in Congress posed unusual questions to government officials Tuesday, marking the first congressional hearing on UFOs —...

Load More
  • Trending
  • Comments
  • Latest

Bitcoin Is ‘Definitely Not a Fraud,’ CEO of Mobile-Only Bank Revolut Says

March 2, 2022

Bitcoin’s Main Rival Ethereum Hits A Fresh Record High: $425.55

March 3, 2022
How online shopping has changed over the last 30 years | National

How online shopping has changed over the last 30 years | National

April 6, 2022

India: Bitcoin Prices Drop As Media Misinterprets Gov’s Regulation Speech

March 4, 2022

US Commodities Regulator Beefs Up Bitcoin Futures Review

0

Bitcoin Hits 2018 Low as Concerns Mount on Regulation, Viability

0

India: Bitcoin Prices Drop As Media Misinterprets Gov’s Regulation Speech

0

Bitcoin’s Main Rival Ethereum Hits A Fresh Record High: $425.55

0
USA finance and payments live updates: Bitcoin drops, $400 monthly check car owners, Child Tax Credit 2022, S. – AS USA

USA finance and payments live updates: Bitcoin drops, $400 monthly check car owners, Child Tax Credit 2022, S. – AS USA

May 20, 2022
Bitbuy Is Serving The Hottest Deal For Bitcoin Pizza Day

Bitbuy Is Serving The Hottest Deal For Bitcoin Pizza Day

May 20, 2022
Who does Ponzi scheme better? [Video]

Who does Ponzi scheme better? [Video]

May 20, 2022
In wake of crash, cryptocurrency regulation focus heightens

In wake of crash, cryptocurrency regulation focus heightens

May 20, 2022

Latest News

USA finance and payments live updates: Bitcoin drops, $400 monthly check car owners, Child Tax Credit 2022, S. – AS USA

USA finance and payments live updates: Bitcoin drops, $400 monthly check car owners, Child Tax Credit 2022, S. – AS USA

May 20, 2022
Bitbuy Is Serving The Hottest Deal For Bitcoin Pizza Day

Bitbuy Is Serving The Hottest Deal For Bitcoin Pizza Day

May 20, 2022

Categories

Site Navigation

  • Home
  • About us
  • Contact us
  • Privacy policy
  • Terms and services
  • Home
  • About us
  • Contact us
  • Privacy policy
  • Terms and services

© 2022 Designed by news4global

No Result
View All Result
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • Videos

© 2022 Designed by news4global