Crypto.com, one of the world’s largest cryptocurrency exchanges, has come under fire for its trading teams. The company has two separate trading teams, one that trades for its own account and one that does market making. This has raised concerns about potential conflicts of interest.
For example, the trading team that trades for Crypto.com’s own account could have access to information about customer orders that could give it an unfair advantage. Additionally, the trading teams could be incentivized to make trades that benefit Crypto.com, even if it means making trades that are not in the best interests of its customers.
The Crypto.com team said:
We have an internal market maker that operates on the Crypto.com exchange and that internal market maker is treated exactly the same as third-party market makers that identically facilitate tight spreads and efficient markets on our platform.
This is not a controversial practice.
We have an internal market maker that operates on the Crypto.com exchange and that internal market maker is treated exactly the same as third-party market makers that identically facilitate tight spreads and efficient markets on our platform.” “This is not a controversial practice
Crypto.com has defended its trading practices, saying that they are “designed to protect our customers and ensure that they have access to the best possible trading opportunities.” However, the company has not provided any details about how it prevents conflicts of interest from arising.
The concerns about Crypto.com’s trading teams come at a time when the cryptocurrency industry is under increasing scrutiny from regulators. In the United States, the Securities and Exchange Commission has warned investors about the risks of investing in cryptocurrencies. The SEC has also said that it is investigating several cryptocurrency exchanges, including Coinbase and Binance.
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