In the wake of FTX’s collapse, Bitget and other CEXs are addressing the urgent need to establish trust and credibility with their users, driving a transformative wave of innovation and adaptation.
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“The unfortunate fall of FTX and the resulting loss of customer funds has undeniably cast a shadow over the cryptocurrency exchange industry, particularly CEXs,” told senior research analyst at Nansen, Osgur Murphy O Kane. Together with Bitget’s managing director Gracy Chen, they discussed the state of the CEX landscape after the FTX collapse in a recent Cointelegraph live AMA session.
Speaking about the trends happening in the CEX space, the guests outlined exchange consolidations, the prevailing importance of DEX and DEX lending, and regulators strengthening their presence especially in Asia. Both speakers noted that the CEX space has put a renewed focus on trust and transparency through the implementation of various practices.
Using Bitget as an example, Chen referred to the publication of protection funds, a practice Bitget implemented last June before the industry’s dramatic events emerged. “We had $200 million in protection at the time, and we have increased that to $330 million, a fact that anyone can verify online,” Chen noted.
Pointing out that Binance has also boosted its protection funds, O Kane added: “It is crucial to note that these steps alone cannot provide an absolute guarantee of security. However, they are a step in the right direction.”
Proof of reserves, which essentially reflects how much a company holds in terms of major cryptocurrencies, is also becoming an industry standard. In addition to Bitget, other exchanges such as KuCoin, OKX, Bybit and Binance are adopting this approach to build trust and meet regulatory and compliance requirements.
Chen also emphasized the importance of being community-focused for Bitget. “We aim to prioritize the needs of our users by providing better services, favorable rates and protection mechanisms to prepare the industry for mass adoption. In line with this approach, we have also made amends to users who have experienced problems due to our platform. An example of this was our move to compensate users who invested in a fraudulent project listed on our platform, because they’re still our users,” she said.
Moreover, Bitget continues to innovate and develop products that improve the user experience and attract more users. Launched in 2021, the copy-trading feature, which allows users to replicate the trading techniques of elite traders, has made Bitget the largest copy-trading platform in the world.
Another recent addition to the platform is Martingale AI, which provides investment advice to crypto beginners and enables automated trading based on AI-recommended parameters. “We will continue to develop and add more AI features to Bitget to improve the user experience,” Chen said. “However, I want our users to be aware of the possible risks, as AI can be biased and make inaccurate assumptions. From our side, we’ve spent a lot of time verifying the input data, but we can’t guarantee that the AI will interpret it in the best way.”
To solidify its commitment to regulatory compliance and user protection, Bitget has also launched a custodial service with custody firm Copper and registered as a virtual asset service provider in Poland and Estonia, strengthening its credibility in the Anti-Money Laundering process.
When asked how Bitget largely increased its spot trading volume in recent months, Chen shared the details:
“Our approach included increasing valuable assets by studying on-chain data and identifying what the community is drawn to. Our research delves into promising industries and projects based on their metrics such as TVL, significant events and major changes in the projects. This isn’t standard practice for exchanges, but it gives us a first-mover advantage. We also evaluate various factors such as community strength, user behavior and on-chain risk before listing tokens. Here are a few examples: We listed the Pepe token three weeks before Binance, Arbitrum ecosystem tokens before Arbitrum did it themselves, and PENDLE to capture the growth in LSDFi TVL after noticing an increase in Ethereum staking. This proactive approach will be maintained as we aim to provide more research for our users, especially institutions and VIP users.”
Chen also highlighted the importance of crypto project ecosystems: “In terms of global expansion, we recognize that competition among exchanges is no longer just about transaction volume, but also about building an ecosystem and venturing into the real Web3 world.” She talked about strategic collaborations, such as Bitget’s acquisition of decentralized multi-chain wallet Bitkeep and Bitget’s strong ties with venture capital fund Foresight Ventures, as well as its incubator program ForesightX.
“Demonstrating a clear commitment to the ecosystem is key to increasing legitimacy,” added O Kane. “Moreover, maximizing credibility is the only viable survival strategy for CEXs in both the short and long term.”
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