What do you all think about enforcing regulations for crypto trading on exchanges, kind of like what Coinbase UK seems to be doing before letting people trade? They have some requirements:
First, users have to accept clear risk warnings that they might lose all their money. Then, investors need to label themselves as "restricted investors" and say they won’t put more than 10% of their total assets into high-risk investments, including revealing the real percentages of their past and future investments.
Finally, there’s a mandatory quiz on knowledge that users must pass before they can start trading. This quiz covers things like staking, trading hours, risks involved with exchanges, and regulations.
Check out the Knowledge Assessment by Coinbase UK.
Binance did it too and I remember that they provided it since several years ago, not in 2024.
Is Binance a first exchange attaching risk warning and risk acceptance before users answer several questions like 5+ questions, before they complete these questions and are allowed to trade with new listed coins, or with Margin, Futures trading types?
It is like Disclaimers from Binance and Coinbase, or other exchanges. I am sure with you that traders don't mind to read those questions and think deeply about risk warnings. They only answer quickly to start trading as soon as possible.
I think that there should be some information given to users that will explain them risks and warnings that come with crypto trading but quizzes are a stupid idea because no one really cares about them and all they want is to bypass them immediately. Also some people create text and video guides and if you google quiz, you'll find answers to every question. Binance had mandatory quizzes and it was stupid.
I don't agree with the regulation of "restricted investors". It's nobody's job how much I invest in anything. If I believe that a risky coin will bring me back tons of profits, like PEPE, I might risk, invest lots of money and my life will change forever for good. Maybe this risk is worth it for me, it's very individual, so I highly disagree with not investing more than 10% of our net assets. Such a restriction will increase inequity in the market.
This is very good. I remember when I first registered on Binance, I saw somethings like this during that time. Also if they send email messages, they end the message with how crypto is very risky. Also if you want to start margin and future trading, you will have to answer some questions. I do not know if Binance is still like this or not. I do not noticed it on most exchanges. It will be good if all exchanges are mandated to make sure such information are available for all newly registered customers before they will be able to access the exchange products and services.
Nope, it's a bad idea.
I don't like the second rule because I invest in Bitcoin more than 10% of my net assets, holding 10% won't make me rich because I'm not rich and have a lot money. For now I'm holding like 99% in Bitcoin, if I buy Bitcoin from Coinbase, it would be a big problem.
Not to mention having these rules will increase the chance our coins to be frozen or confiscated.
If i'm not mistaken what i remember the specific exchange that do the same things is binance, wherein they provide quizzes and from it you can actually obtain some information such how trading works especially using leverage and etc. but now I don't know if still existing since i move to another platform. But yeah these kind of activity on some exchanges are really helpful and it would be better if all of them do the same thing for the sake of new comers so that they are aware as well and become knowledgeable ,not that they always ended up complaining about trading is a gamble and scam after losing money because of greediness. Lol
I guess this common to every exchange (well, at least to those i used) were every notes and warning can be seen on the platform. But as if it will work on people who don't bother reading the as they already how exchange works and do the trade. Also, how would they know if the user uses it's X% net assets? Again that won't help it just there for warning and regulatory compliance purposes.
But for the knowledge assessment, i guess it's a good idea to filter people who knows what they are doing.
I dont know maybe binance was the first to implement such disclaimer but most of the exchanges I know most definitely will give you all this disclaimer and even want you to undergo some demo trading lessons first before you will be allow to even trade. One thing I can even remember was that exchanges like bitget and bybit even have you on low leverage percentage until some certain trades have been done I dont know maybe it still exists for new users
There is even exchanges like Mexc that usually warns about newly listed coins and they place restrictions too. But will this help i doubt because outside this exchanges people can still access this volatile cryptos from different exchanges like ever decentralized ones that gives you freedom to do anything you like.
I think it is good to have thing for every legal crypto exchanges. It also provides the exchanges with legal protection if problematic users try to sue the exchange for their own losses.
These kind of acknowledgements are needed for trades with leverage and options trading which carrier a very significant amount of risk. Good initiative! I think Binance has also implemented something similar. it's not anymore appearing for me though.
I think it is of immerse benefits for other exchanges to implement what Coinbase UK is doing because for newbie traders, it would help them save and earn more and be safe from hacks and scams as compared to the oldies who learnt a thing or two from the experiences they had when joining the exchange for the first time without this assessment of sort to test their knowledge and keep them informed. It would also help the exchange stay in business longer seeing they did not default according to regulatory standards.
There's so much benefits associated with assessment of a users knowledge and adherence to the risk warnings requirements before one's trading journey begins.
The benefits doesn't go beyond being able to make a better decision, having reduced losses, promoting financial knowledge and enhanced user protection.
Still, it is paramount that exchanges make their sites very much less cumbersome with the information on display, the style of fonts and colors being more accommodating to the eyes with regular updates and assessments to test the users current knowledge regularly, so as to stay in compliance with what the regulatory bodies dictate.
Absolutely good.
Though, of course, lazy folks will always find a way to game the quizes lol. If memory serves right, cheat sheet about such quizes have been circling around the community. But it is still better than nothing. It's like how we keep repeating things like not your keys, not your bitcoins. Obviously, not everyone will listen but some may do.
I'm not a fan of the 10% rule, though. Assuming every cryptocurrency is considered high risk investments because such is too little for me. I do have a feeling it's just for assessment's sake and not actually enforceable.
Good.
Exchanges should begin to help their customers to make the right decision whether or not trading is good for them, if that is what the actually want.
It is like a dose of reality. You don't go into something that you don't understand because you see people claim that they make money from crypto trading and you want to be like them.
I think it is an ethical approach that should be adopted by crypto exchanges.
In my view with leverage trading, most of the platforms do have some knowledge assessment Surveys like a multiple choice list of questions, they can improve that as in many exchanges if you try once or twice you'll be able to find the correct answer which is kind of cheating and for that, they need to randomize the questions also a short crash course before the questions would be great.
For the rest, every mature man knows that he should not risk his money into something he don't know.
I do not think exchange should be responsible for reminding you to be extremely careful with the decision you take for a risky investment involving cryptocurrency. For anyone that wants to remind their customers, they have done well but it should be the responsibility of the trader to make all this decision on their own before opening an exchange. Exchange to me are just service providing platform therefore their work is to provide that service in the best way they can and not put the users funds in danger. They should not be responsible for telling the trader how to do their business because with all this, they can be implicating their exchange as they are also supposed to verify all they are asking and not just giving us an option to choose from.
I agree with the UK government risk warning and knowledge assessment implementation because most of the social media influencers and KOLs we have in today's market are abusing the influencer power especially those on Tiktok which will recommend a certain meme coin with no solid concept, and good team experience to their followers.
A lot of newbie crypto investors have lost a fortune through their recommendations. I believe the UK government studied all this together with the scam game played by most altcoin teams to create this risk warning and knowledge assessment. However, their second implementation is what I don't support.
I don't know if this has been mentioned but Binance has risks warnings like this active on some of their products like futures that require users to explicitly learn about the risk of futures and other high risk investment/trading products.
Imo, risks warnings like that are good heads up for users and will enable them to take well informed decisions. I say this because when I first started hearing about futures, there were no risks warnings and my first attempt, I got my $ wiped off. Would've problem made a different decision probably to wait if there was a risk warning.
Good move imo:
risks warnings good.
restricting trading experience bad.
I mean, if you are going 100% in, then yeah probably should ask you if you are certain and all, or even require you to put in your 2FA if you are doing something with 100%, to make sure you are definitely aware what you are doing. But aside from that, I do not see how every single trade could be anything risky, there shouldn't be another job added to exchanges just because people lose money.
If you are not doing your proper research, then we can't really do anything further than that, we can't make it change anytime soon, it's just not possible for anything more than that to work out in the end. I believe we should let exchanges not care about the trader, because traders loss or risk is all the traders job, there isn't really anything that is more than that for the exchange to care.
Right, this could be a good reminder for all traders, newbies or not, to keep all their trades not crossing their lines, otherwise it would lead to a mess and put ourselves at the losing end. While this could not be seen in some exchanges, but I also hope all licensed exchanges should exert more effort to educate particularly new traders so they can make informed decisions regarding on how to stay responsible on their trades, and not just resort into random trading and put their funds into waste.
Yes, it should be implemented by all crypto exchange. Some other exchange like binance already have such policy implemented for more than two years now to my notice. Especially the third rule, you can not carry out futures trading on binance without successfully passing the quiz 100% . If out of 5 questions, you failed one, you will have to redo it until you get it 10/10 before you will be allowed to trade.
So, I think that the rules should be implemented by all exchange so that any trader would be aware of the risk.
The above proposals is already implemented by many exchanges I know. As a first timer, before you would be allowed to trade, they take you through many warnings and undertaking that you would acknowledge.
This is very necessary for the newcomers in the industry.
In as much as we want these guys to do this, we must also acknowledge that they're also in business to make money. So, there's an extent to go the compliance if not pressured by the government.