A few days ago, one of DEX exchanges announced a loss of more than 600.000 USD worth of USD Coin tokens.
It was caused by an error of the developers, who were trying to launch updated code through a transaction and decided to forcibly shut down the application. As a result, the developers lost a sizeable amount of money.
However, according to representatives of the project, only 5% of the sum was not owned by them. They promised to recompense users’ losses in the first half of September.
In early August, hackers stole around 5 million USD from one of the most popular crypto exchanges. The news of a possible hack started appearing after the exchange announced a temporary suspension of deposits and withdrawals. The exchange administration claimed that the restrictions were caused by unexpected crash of certain applications and requested users not to transfer funds until the maintenance is over.
It is impossible to deny the existence of negative aspects and risks of using decentralised exchanges (DEX). Due to possible vulnerability of smart contract and web interface code, they are prone to breaches and hacks. Even though most cryptocurrencies use smart contracts in the Blockchain network, they are accessed through web sites that, along with collecting cookies, are often services that are officially licensed and owned by an individual or a company. In order to access the service, users often need to provide their personal information to administrators, while administrators and the owner have to provide personal information to the hosting provider.
There is a tendency for equalising of the rules between decentralised and centralised exchanges by regulatory bodies.
So, the Financial Action Task Force (FATF) has announced plans to regulate DEX. Which would mean that decentralised exchanges, the main objective of which is to allow users to trade without abiding by KYC, will have to abide by the same rules as centralised exchanges.
If the rules are approved and the participants are forced to adhere to recommendations, the original purpose of decentralised exchanges is lost. Because “decentralised” should mean “free from centralised oversight” and no one can stop the operation of DEX.