• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M
Research: The Role of Decentralization in Creating Transparency in Cryptocurrency Companies

Research: The Role of Decentralization in Creating Transparency in Cryptocurrency Companies

user avatar

by Max Nevskyi

2 years ago


Major participants in the cryptocurrency industry evade answering crucial questions about transparency and resort to using the term "decentralization" to obscure the details of their operations.

Contents:

Opacity and secrecy: Research findings on cryptocurrency companies and their business practices

In a recent study conducted by the Financial Times, some leading cryptocurrency companies are avoiding disclosure of their business practices. According to the publication, 21 companies specializing in Web3 were surveyed. However, eight of them refused to provide even basic information.

Questions were raised about the company's main office location, legal basis of its operations, composition of the board of directors, and the conduct of audits. Doubts were also expressed regarding certain business practices, such as the segregation of investment funds, provision of loans based on client assets, as well as trading and custodial operations.

Crypto companies that were queried:

1. BlockFi 2. Crypto.com 3. Genesis 4. Jump

Research: The Role of Decentralization in Creating Transparency in Cryptocurrency Companies - news

Research: The Role of Decentralization in Creating Transparency in Cryptocurrency Companies - news

Companies often face accusations that they use the term "decentralization" to avoid regulation applicable to specific jurisdictions. While some companies already have their headquarters, others still need to clarify this situation.

Transparency Challenges in the Cryptocurrency Industry: Revelations after the FTX Crisis

Following the financial crisis that occurred with FTX last year, cryptocurrency companies have been facing demands for greater transparency. Despite exchanges starting to provide evidence of claimed reserves, some have encountered issues due to the lack of audits or failure to provide confirmations of their obligations.

After the departure of FTX, one of the largest companies in the cryptocurrency sphere, the spotlight and attention turned to the cryptocurrency exchange Binance. As a result, it attracts intense scrutiny not only from regulatory bodies but also from the media, who constantly question its activities.

When we are tasked with verifying a cryptocurrency exchange or custodian, they present you with a non-disclosure agreement... This can be a very limiting factor.says James Newman, co-founder of a comprehensive crypto auditing firm

Shortly after FTX's bankruptcy, auditing firm Mazars exercised caution and withdrew its audit of Binance's reserves, as well as discontinued providing services to other cryptocurrency exchanges, explaining that they did not want to mislead the public with their reports. They only released a report on agreed-upon procedures (AUP), which is not a full audit report.

Deception in Decentralization

Subsequently, Binance announced that even the leading "Big Four" auditing firms refuse to audit the exchange's reserves. These firms include:

  • PricewaterhouseCoopers
  • Deloitte
  • KPMG
  • EY

The situation became further complicated due to concerns raised by the U.S. Securities and Exchange Commission (SEC) regarding the legality of conducting audits on cryptocurrency exchanges.

Tether, the issuer company of the stablecoin USDT, has always faced criticism for the lack of proper auditing. In a survey conducted by the Financial Times, Tether, like most other surveyed companies, did not provide complete information about auditing procedures.

As more jurisdictions seek to establish clear norms and rules, ensuring transparency at all levels will become more convenient and effective.

Previously, analysts wrote that Binance is investing in Twitter.

0

Share

Other articles

The Mistwood: Diving into Magic and Building directly on Telegram

The Mistwood is a unique Telegram game combining farming, adventure and construction. Thanks to its isometric graphics and deep mechanics, it attracts both beginners and experienced players.

user avatarMax Nevskyi

3 hours ago

What Is ClubGG — A Blockchain-Based Poker Platform with WSOP Qualifiers and Club Play

Discover how ClubGG blends blockchain with poker through subscriptions, tournaments, and WSOP qualifiers. Full breakdown of features, clubs, and security measures.

user avatarElena Ryabokon

3 hours ago

Franky's Dinner: A Web3 Arcade Adventure with NFT Frogs and On-Chain Economy

Franky's Dinner is a Web3 arcade game featuring NFT frogs, a humorous escape story, and on-chain asset ownership. Run, collect apples, and be part of a blockchain-powered world.

user avatarElena Ryabokon

15 hours ago

Tabi — A Modular Blockchain Platform for Web3 Gaming and Developers

Discover how Tabi Chain is revolutionizing Web3 gaming with modular architecture, Proof of Attention rewards, and a developer-friendly ecosystem.

user avatarElena Ryabokon

18 hours ago

The Blockchain Group: European Leader in Bitcoin Treasury and AI Blockchain Innovation

An in-depth look at The Blockchain Group — the first European company focused on Bitcoin Treasury strategy, AI development, and decentralized technologies. Includes analysis of its business model, investments, and tech evolution.

user avatarAlexandra Smirnova

21 hours ago

PenguinQuest: a quest-based game with in-game assets and progression in Telegram

PenguinQuest is a story-driven crypto game where players complete quests, develop characters, and earn tokens in a game world built on TON blockchain technology.

user avatarEve Adams

a day ago

dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.