In 2021, we’ve seen and heard a lot about cyberattacks and ransomware hacks on large corporations including energy pipelines and food processing operations – just to name a few.
Most recently, the Polygon Network suffered a vulnerability where users had more than $600 million removed from their accounts. Those funds were returned shortly thereafter but theft is a threat for virtually any asset including cryptocurrencies.
According to Statista, cryptocurrency theft has been on the raise in recent years worldwide. The graph below shows more than $370 million was seized by bad actors in 2019. The following year, the amount of stolen crypto funds increased more than 38% to $513 million.
The trend is moving in the wrong direction for digital hodlers and investors alike.
Nimrod Lehavi is the co-founder of Simplex, an EU-licensed financial institution that provides fiat infrastructure for the cryptocurrency industry. In his exclusive interview with DailyCoin, Lehavi said that every industry has bad actors, so Simplex has to work harder to stay ahead.
“At Simplex, we always try to play by the rules. However, some [competitors] are doing things that I don’t define as legitimate business practices. Sometimes these practices are illegal, sometimes they fall in the gray area.
Regardless, we prefer to stay 100% clean and not do anything like that at all to maintain our reputation. Instead, we have to act faster, but I’m guessing that everyone who has one hand in software wants to do everything faster,” said Lehavi.
Founded in 2013, Simplex has more than 350 network partners and allows trading in more than 45 crypto assets using 50+ fiat currencies for crypto purchases.
Lehavi says he’s committed to cooperating with regulators but others in the crypto-space are not so willing.
“Businesses that are 100% crypto and completely detached or completely decentralized or completely anonymised - they don’t really care about regulation.
However, a big section of the crypto ecosystem - including ours - involves fiat on- and off-ramps. That section is under intense regulatory scrutiny. Questions facing us and regulators include: what will happen, how will it change, and what would be the classification of DeFi.
Honestly, I don’t think that any regulator believes that they can actually follow DeFi fast enough and issue regulation fast enough, it’s just impossible,” Lehavi said.
Lehavi says it’s important to focus on engaging with customers and understanding what they want – even more so than regulators. He says if you take care of your customers in an ethical and communicative manner, those customers will take care of you.
“If we understand that we miss something or we get a lot of user feedback - we create a constant feedback loop with users. Because we’re mostly working with retail clients, they know how to communicate their disagreement with whatever processes we have. They know how to be heard. We get this constant feedback both from our partners and from their clients. So we’re able to add features, change features, move features all the time. It creates a virtual cycle that benefits us all,” he said.
On The Flipside
- Betting against governance and oversight is still a trend and the way of working with the regulators will still have to run its course to prove beneficial for businesses.
- Governments still have a monopoly.
Watch the full interview here:
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