“Trust Us, We’re an Exchange!” Simply isn’t good enough

The recent resurgence of news around bankrupt crypto exchange Mt. Gox preparing to reunite customers with (just 15%) of their lost Bitcoin has been a sobering reminder of crypto’s battle with scams.

The industry has a reputation problem; and given the increasing numbers of investors and users entering the space, it’s time to step up and take action. 

Paul Quickenden, blockchain futurist and Chief Commercial Officer at Easy Crypto, weighs in on what the industry needs to do to improve its reputation through two key focuses.

Two sides of the same coin… 

In the rapidly evolving world of crypto, trust must be continually earned by institutions, providers and innovators as they design and build out the functionality and user experience to engender the trust that the next wave of adopters needs and expects.

At its core, ‘digital trust’ is two sides of the same coin: ‘operational’ trust ensures that technology is reliable and less prone to scams and attacks, while ‘relational’ trust focuses on empowering, educating and protecting users.

For the industry to grow sustainably, both types of trust must be in place to ensure decentralised finance is as inclusive and fair as possible to its diverse range of users. 

Operational trust 

Investors and potential users all want (and deserve) a safe, secure investment environment.

While blockchain technology inherently offers security, crypto innovators can enhance this by integrating security and clever UX into the design, development and deployment stages of crypto offerings (such as exchanges):

• Enhanced security measures: Using blockchain analytics to detect and block suspicious transactions is key to keeping users safe. Monitoring user activity and system access can help service providers detect and respond to threats in real-time. Easy Crypto frequently declines transfer or deposit requests when fraudulent activity is suspected, thereby prioritising user safety over short-term profits to build trust and demonstrate good digital citizenship.
• High standards of quality assurance: Rigorous testing before releasing software to the public and providing timely updates and patches that address vulnerabilities and keep software secure is key.
• Data privacy: Adhering to major data protection regulations and clearly communicating how data is collected and used is key to building user trust.
• Zero trust architecture: Limiting access to systems and data based on the principle of least privilege to reduce unauthorised access risks is another important way of keeping user data and assets safe.

Importantly, crypto exchanges that take custody of investor funds are essentially replacing centralised control with another form of centralised control in which users cede access to their money to someone else.

Non-custodial exchange models in which users manage their own crypto via their own personal wallets, underscore user autonomy and security. 

Ensuring users can do so safely and with minimal friction is important, including innovating around how users ensure they safeguard their access.

Many wallet innovators believe self-custody doesn’t necessarily have to mean using a complex (and in many cases, easy-to-forget) seed phrase.

Technologies like Multi-Party Computation (MPC) use ‘key shards’ rather than entire seed phrases to authorise transactions, providing users effective control over their assets with options like Two-Factor Authentication (2FA).

Easy Crypto is also pioneering new ways of offering users wallet ‘back-up’, including secure cloud-based back-ups to help you in case a recovery process is neeed. (In short, we are trying to make it human.)

Relational trust 

Investors and newcomers want more than just a secure platform; they want to be valued as a customer and receive support in their crypto journey.

While robust security is crucial, the industry must foster a culture of trust and transparency that goes beyond technical safeguards to create a user-centred environment that empowers, educates, and protects users. 

This relies on both regulation and empowerment:

Industry-wide regulation

Proper regulation is needed to give consumers confidence and ensure the same standards expected from their other financial service providers.

This will require coordinated, cross-industry collaboration globally. Encouragingly, initiatives like the Digital Trust Working Group formed in 2023 to advise the Asia Pacific Economic Cooperation, which includes 21 member economies, are already underway with key representation from the blockchain industry. 

Empowerment

Adopting a user-centred approach to simplifying all aspects of the crypto experience will help accelerate adoption by a great number of users. 

This needs to include:

• Communicating clearly and giving detailed guidance: Crypto projects and platforms should use simple, plain language to communicate. Exchanges need to provide information and tools to help users make better decisions around crypto, available in multiple languages. Easy Crypto ensures education and information are provided at every step for its users, aligning with its mission to equip people with the tools for better financial decisions and re-educate them about crypto’s potential.
• Building culture of trust: Demonstrating a commitment to customer well-being by establishing channels for customers to raise feedback and concerns is essential. Responsive customer support is crucial for addressing issues related to digital trust; no one wants to endure long wait times when it comes to the safety of their money, digital or otherwise.

There’s work to do to change the narrative completely; but through a focus on both operational and relational trust, the crypto industry will be able to answer “YES!” in good conscience to the question: “Is it safe to invest in crypto?”