Leigh Travers

FTX reboot could falter due to long-broken user trust, say observers

Crypto industry observers have questioned whether customers or investors will ever want to “come near” FTX again.

Several crypto industry commentators have expressed skepticism about FTX CEO John Ray’s vision to potentially reboot the crypto exchange, citing trust issues and “second-class” treatment of customers as reasons why users may not “feel safe to go back.”

Former FTX CEO Sam Bankman-Fried tweeted on Jan. 20 praising John Ray for looking at a reboot of FTX, suggesting it is the best move for its customers.

I’m glad Mr. Ray is finally paying lip service to turning the exchange back on after months of squashing such efforts!

I’m still waiting for him to finally admit FTX US is solvent and give customers their money back…https://t.co/XjcyYFsoU0 https://t.co/SdvMIMXQ5K

— SBF (@SBF_FTX) January 19, 2023

This came after John Ray told The Wall Street Journal on Jan. 19 that he was considering reviving the crypto exchange to make the users whole.

Ray noted that despite top executives being accused of criminal misconduct, stakeholders have shown interest in the possibilities of the platform coming back — seeing the exchange as a “viable business.”

In comments to Cointelegraph, Binance Australia CEO, Leigh Travers, believes it will be difficult for FTX to secure a license again, particularly as the industry moves into a new year with increased regulation and oversight by regulators.

Travers also noted that since the closure, FTX users have migrated “to other platforms, like Binance.” He questioned whether those users will “feel safe to go back.”

He addressed the issue of FTX governance and controls, with administrators sharing details about some clients getting “preferential treatment,” including “back door switches.” Travers noted:

“How will users feel comfortable going back to a platform that treated some clients as second-class?”

Digital assets lawyer Liam Hennessy, a partner at Australian law firm Gadens, thinks that it would be “very difficult” for FTX — given the reputational damage and lack of trust — to get customers or investors to “come near them again.”

Hennessy was also skeptical whether FTX will ever get approved for a license again, saying that it is “one big question mark” which entirely depends on jurisdictions.

The lawyer believes that in some offshore jurisdictions, it will be easier for the exchange to get license approval, but it will be pointless if its users do not intend to return.

“To jump through the hoops the major jurisdictions will set such as the US, UK and Australia will be a serious challenge.”

Meanwhile, RMIT University Blockchain Innovation Hub senior law lecturer, Aaron Lane, told Cointelegraph that it is “not surprising” that FTX would consider reviving the exchange business, stating that is the purpose of the Chapter 11 process — giving the company the ability to propose a plan to run the business and pay the creditors back “over time with the court’s approval.”

He believes that the “onus will be on FTX,” or a creditor that files a competing plan, to show that creditors will get a “better result” under the revival plan compared to liquidating FTX’s assets.

Lane however also questioned whether customers will ever trust FTX again, saying it is possible that another company looking to launch a new exchange “purposes those assets” rather than developing its own interface from scratch.

Customer support staff swamped during market swings — exchange execs

Binance Australia’s CEO says it is imperative that customer support is ready for a large influx of customer inquiries at any moment.

Crypto market turbulence can be an immensely stressful time for customer support staff at crypto exchanges, with companies vastly bolstering headcounts just to meet demand during surges.

Speaking to Cointelegraph, Alex Harper, co-founder and CEO of Australian crypto exchange SwyftX said that “no matter what your role title is […] no one was above customer support at Swyft.”

He said that he, along with staff members from human resources and the CFO have had to work late into the night on occasion to assist their customer support teams when markets go crazy, explaining:

“Elon Musk quotes posts about Dogecoin, you get seven times daily signups”.

Harper explained that SwyftX strives for a two-minute response time, “given customers need to have questions answered and understand things.”

He also noted that their customer staff team now makes up over a third of their headcount, offering the ability to provide 24/7 support.

Leigh Travers, CEO of Binance Australia, told Cointelegraph that Binance’s customer support team has “expanded” to keep up with customer demand, and given how new cryptocurrency is for even those working in customer support, investing in their training and development is a priority.

Travers suggested that customer support departments are prioritized in the company, describing them as “the window to the entire Binance platform,” recognizing their work as vital to the success of the company.

“Team leaders and country managers participate in a user centric training program to understand the role of customer support and protect users and receive first hand customer experiences.”

Travers explained that due to unpredictable events in the crypto market such as the Terra Luna and UST “unwind” causing a dramatic “spike” in demand for customer support; it’s imperative that the customer support team are ready for a large influx of customer inquiries at any moment.

Travers said he has also jumped behind the deck of the Binance chat support and directly “responding to user inquiries,” in order to better understand how it works behind the scenes, adding this was a vital part of ensuring customer support can match the demand.

Travers explained that when markets stabilize customer support staff take advantage of the down period to utilize the “quieter time” creating “explainer blogs and FAQs to give users better easily accessible information.”

He added that the onboarding process can be the most demanding for customer support workers “regardless of the market conditions, including whether it’s a bull or bear market” their customers always “want to be onboarded quickly and efficiently.”

Customer support gets swamped during market swings — Exchange execs

Binance Australia’s CEO says it is imperative that customer support is ready for a large influx of customer inquiries at any moment.

Crypto market turbulence can be an immensely stressful time for customer support staff at crypto exchanges, with companies vastly bolstering headcounts just to meet demand during surges.

Speaking to Cointelegraph, Alex Harper, co-founder and CEO of Australian crypto exchange SwyftX, said that “no matter what your role title is […] no one was above customer support at Swyft.”

He said that he, along with staff members from human resources and the chief finance officer have had to work late into the night on occasion to assist their customer support teams when markets go crazy, explaining:

“Elon Musk quotes posts about Dogecoin, you get seven times daily signups”.

Harper explained that SwyftX strives for a two-minute response time, “given customers need to have questions answered and understand things.”

He also noted that their customer staff team now makes up over a third of their headcount, offering the ability to provide 24/7 support.

“Team leaders and country managers participate in a user centric training program to understand the role of customer support and protect users and receive first hand customer experiences.”

Travers explained that due to unpredictable events in the crypto market such as the Terra Luna Classic (LUNC) and TerraUSD Classic (UST) “unwind” causing a dramatic “spike” in demand for customer support; it’s imperative that the customer support team are ready for a large influx of customer inquiries at any moment.

Lack of ‘qualified people’ without more Web3 education, say academics

Blockchain Academy International’s Huxley Peckham says there are already 60 different industries using blockchain tech today.

Australian blockchain academics and educators have called for more robust Web3 education in schools, preparing students for a world that will be dominated by blockchain technology.

Huxley Peckham, head trainer for Blockchain Academy International told Cointelegraph that there are “very few qualified people in the blockchain industry, but there is big demand for qualified people,” noting that worldwide, there are at least 60 different industries using blockchain tech.

Both Peckman, and Blockchain Academy International founder Tim Bowman said it was time to rapidly expand blockchain education in schools in order to prepare for a shift in the world economy.

Peckham believes blockchain education is important as it will allow “the next generation of strategists and consultants to come out with some real grip in this industry,” noting that knowing how to apply the technology will “really enhance their career.”

He suggested blockchain is a lucrative industry to jump into, noting he’s seen various jobs in the industry commanding “$300,000 [Australian dollars] plus incentives.”

Chris Berg, co-director of RMIT University Blockchain Innovation Hub, told Cointelegraph that it is vital students have an idea “on what does the economy look like, how the economy is changing” as it relates to cryptocurrency and blockchain.

Berg firmly believes that students “need to leave year 12 with an understanding of the changing nature of the economy, and the technologies that will affect it, one of those is blockchain.”

Meanwhile, Leigh Travers, CEO of cryptocurrency exchange Binance Australia, told Cointelegraph that it was imperative that Australian students can access the same level of high-quality education in blockchain as those seeking a career in traditional industries.

Travers noted that Binance Australia recently introduced a “Binance Internship” — allowing students to learn from the best in “Web3 and crypto” and “hopefully land jobs outside of that.”

This is alongside plans for Binance Australia to form a partnership with Australian universities so that a “blockchain master’s degree” can be established to help people “get into the Metaverse or build that out for the future.”

Bowman noted that his academy has “met with a school in Brisbane who are going to be offering a Diploma of Applied Blockchain to their year 11 and 12 students in 2023.”

Blockchain Academy International is the first blockchain education facility to be approved in Australia for government-issued student loans.

This allows Australians to enroll in its blockchain courses without having to pay upfront, instead taking out a loan with the Australian government the same way university loans are provided.

Bowman said he believes young Australians are already ahead of the curve in many ways recalling a personal experience he had talking to a primary school principal who asked a sixth-grade class “who here knows what an NFT is?” which was followed by “half the class putting their hands up” before learning that “six students had already bought an NFT.”

A newly released survey report from Australian crypto exchange Swyftx estimates Australia to gain one million new cryptocurrency holders over the next 12 months, bringing total crypto ownership in the country to over five million.

Binance Aus ramping up measures to protect vulnerable users, says CEO

The general type of people Binance Australia has flagged as vulnerable users are the elderly, people that live in remote areas or those with disabilities.

Binance Australia is tightening up its onboarding process for new users as part of a push to protect users it has flagged as most vulnerable to financial crypto crime.

The new measures were mentioned in Binance Australia’s June quarter Economic, Social, and Governance (ESG) report on Monday, which noted that the exchange was working on a “stringent and user-focused onboarding experience” aimed at groups with a higher occurrence of financial crime.

Speaking with Cointelegraph, Leigh Travers, CEO of Binance Aus, and Zachary Lu from the exchange’s Financial Crime, Risk and Compliance unit, noted the company has been actively working on ways to protect “vulnerable users,” which starts from the onboarding process.

“From the whole financial crime risk management perspective, we are really looking at it from end to end and also from a whole life circle’s perspective,” said Lu:

“We are looking at three main areas: onboarding, ongoing and at the end of the life cycle [the point of time in which someone is scammed].”

Lu outlined that the general type of people Binance has flagged as vulnerable users are the elderly, people that live in remote areas or those with disabilities. Such conclusions were the result of working with various government and research agencies focused on financial crime, he added.

The duo emphasized that the company is paying a particular focus to investment scams, in which criminals promise inordinate returns on investments to dupe people into sending them money.

This type of scam has cost Australians millions worth of crypto, with a recent report from Scamwatch estimating that $25 million was lost in the first half of 2021 due to bogus investment schemes.

“There are 500 different scams, but investment scams are always on the top of it. So this is not exclusive to crypto scams to be honest, but investment scams overall ranked number one for a long, long time,” Lu noted.

To determine the scope of a new user’s crypto knowledge and to ascertain whether they have been guided by a bad actor to sign up under false pretenses, the firm recently rolled out a Know Your Customer- (KYC)-focused quiz that enables them to flag any potentially suspicious activity:

“So in terms of the data there, it’s only recently been implemented. So we don’t have sort of the analysis of how that’s how much that is going to stop. But, this user group was multiple times more likely to fall victim to these types of scams.”

Adding to his point, Travers suggested that a high number of “vulnerable” users generally fall victim to scams within the “first seven-day window” of being onboarded.

As of Sept. 1, Binance Australia will incorporate more stringent identification requirements as part of the user onboarding process. As such, the firm will require new users to provide a photo of their driver’s license and its card number at the time of signing up, as opposed to not needing the card number previously.”

This will be introduced to enable Binance to promptly verify the legitimacy of ID documents as part of the on-boarding process, identify a vulnerable user and also help flag whether someone might be signing up under a stolen ID.

Binance Australia CEO: Regulations will establish higher standards in crypto

Leigh Travers feels that a change in Australia’s government could slow down work on crypto regulations that could prove that the industry is already operating at a higher level than traditional finance.

As the struggle for regulatory clarity down under rages on, Binance Australia’s CEO Leigh Travers thinks that such a framework will prove the crypto industry “holds itself to a higher standard” than many believe.

Travers spoke with Cointelegraph on Tuesday about the current state of local crypto regulatory efforts and how the opportunities available in the industry are restricted by the lack of clarity.

That lack of clarity was cited as the reason why the Commonwealth Bank of Australia (CBA) has indefinitely postponed a pilot program for its crypto trading services last month. Although there are no rules on the books directly prohibiting CBA’s new service, Australian financial regulators pushed for a pause on the services because of absent consumer protections.

Without the regulations in place to allow such crypto services to operate, they cannot prove their viability.

From Travers’ point of view, the crypto industry is already ahead of traditional financial regulatory regimes for several reasons, and he believes new regulations should reflect that. He said he thinks “the crypto industry wants to see regulation” for a good reason:

“People in crypto want to prove that they hold themselves to a higher standard than what people think they actually are.”

Travers believes a prudent regulatory regime would make that higher standard apparent to Australians. With or without new regulations, blockchain analysis firm Chainalysis made it clear in January that when it comes to financial crimes, “cash is still king.”

Another way Travers said the crypto industry sets itself apart from traditional finance is that crypto such as Bitcoin (BTC) and Ether (ETH) do not easily fit into any existing classification for property or financial products. Cryptocurrency is currently categorized as property in Australia.

Travers said that the distinction between crypto and other assets could expand over time as decentralization increases, adding that “crypto fits across different products,” which only compounds the difficulty in responsibly regulating it.

Travers called Senator Andrew Bragg one of the champions for crypto on the Liberal side, but the local industry may be at a loss for such a champion now that the Labor Party has assumed power for the first time in nine years.

He said that the former majority Liberal Party saw the industry “with high paying jobs and contributions to the economy” as a good thing. He worries that the work already underway on new regulations will slow down considerably because “Labor is not immediately focused on blockchain or crypto,” which could put the domestic industry at a disadvantage:

“This industry is crying out for clearer regulation because it’s tough being a service provider in this environment.”

Overall, Travers seems bullish on crypto. He shared his conviction in the future of nonfungible tokens (NFTs) and the various roles they could play in society.

In the short term, he admitted that the way of NFTs is still uncertain and would likely continue to be simple art pieces, but that the long-term implications for NFTs were far-reaching for property rights and intellectual property. He said that he thinks “NFTs are going to be enormous. Intellectual property is why Disney is such a huge company.”

Despite the ongoing price crash where BTC has dipped below its realized price for the first time since March 2020, Travers is generally bullish on the industry. He noted in the short term, “crypto will struggle as so much is macro-driven,” but that it is just a matter of time before the tide changes back for the bulls:

“When the fear of higher interest rates is diminished, crypto will catch that wind and make more opportunities when everything has been sold off.”