Global Database of Crypto Exchanges in the Works | Including Those Operating On The Dark Web

Disclaimer: This looks like financial advice, doesn’t it? If you put your head down and think, you may be convinced that this indeed is financial advice. If you close your eyes, it may seem logical to do what is in the article.

Even then - Do Your Own Research! This is not financial advice! 😊

Okay, the Summary First | TLDR | Wallets Next?

Since the G20 meeting in India, there have been talks of collaboration between countries to cooperate and regulate the crypto space. Here is one of the first articles I wrote.

Remember the Crypto Paper to be discussed at the G20 Summit in India? | Here is a Snapshot

While the framework under the IMF will take at least till 2025 to come to the fore, work on other areas has started parallelly. *A Global Database of Crypto Exchanges is in the works in India. This database would also include the details of those exchanges on the dark web. The main aim is to tackle and deal with nefarious actors in the cryptoverse.*

The database creation will, obviously, need the cooperation of other countries that India will take up through its Ministry of External Affairs. There were other initiatives already in place, like that of the Organization for Economic Cooperation and Development’s (OECD) crypto asset reporting framework. All this works toward keeping a close watch on crypto transactions and isolating bad actors.

Will it help the general masses? It should. Only time will tell, though.

Now Everything Other Than TLDR | Crypto Exchanges and Bad Actors

At the time of writing this article, Coingecko shows that there are 874 crypto exchanges listed on the site. All these exchanges are spread across the world. The need for many exchanges comes from the fact that countries would need their crypto exchange/s to transact in the local currency. However, not all are legitimate ones. To add to that, there would be many exchanges that are not even listed on Coingecko.

The main intention of these unlisted exchanges is to remain anonymous and, in all possibility, created by bad actors for nefarious activities in the crypto space. In addition, even regular exchanges become sour apples over some time and redirect customer funds out of the exchange. An example is FTX and how most customer funds were transferred to dubious holding companies and SBF’s parent’s account. All this came to light quite late, but a robust framework monitoring exchanges could have a better chance of stopping a crime before it happens.

The global crypto exchange database intends to have a closer look at crypto exchanges and crypto transactions. This would include even those on the dark web (or those not on Coingecko). That way, acting swiftly to counter bad actors could be effective.

Will It Work With Only One Country? | What About the Others?

While India is taking the lead in the effort, it is by no means something being done by a country alone. Global cooperation will be the key, and it has already been initiated from the G20 summit of last month. Now, the next activity of creating a global database of crypto exchanges will be initiated.

The work is in line with other efforts across the globe to bring in crypto transparency. On one end of the spectrum is the Organization of Economic Cooperation and Development’s (OECD) framework to track crypto transactions, and on the other end is the United States' SEC's infamous attempt at regulating crypto by classifying them as securities.

The individual attempts by countries will only have a limited effect, with other countries continuing in the crypto space unchecked. So, the global framework would lead to global cooperation and hence a better management of information regarding bad actors in the crypto verse.

What Does It All Lead To?

The result would be a combined global framework that, in a way, is in line with the original idea from the G20 summit. And remember, the global framework as envisaged in the G20 is designed by smart brains in IMF and FSB. That should lend some credence to the entire work.

The Global Exchange Database is in line with the original theme and a good starting point. Imagine having a framework and not knowing where to start the tracking. Isn’t it better to bring the main link used to route all crypto assets? I think it makes sense. And add to that, the list of exchanges that we never knew of and still could route our crypto to bad actors. I think it is a win-win.

Is This All A Good Thing?

There remain concerns from the crypto players that this could be an attempt by the government to monitor and track their citizens. But then, the basic premise is that the people in the crypto space intend to hide from the government. That may not be the true case.

Take a look at the other side of the coin. Even today, the main news doing the rounds is hacks on exchanges, wallets, and even Twitter influencers. Not to mention big names like Mark Cuban losing about $800K worth of assets from his crypto wallet. Wouldn’t this warrant a better framework of cooperation between countries to track such hackers and scammers? Wouldn’t, therefore, regulation be a good thing? Food for thought.

I root for such cooperation between countries that despite removing our crypto anonymity, gives us a better chance at safeguarding our hard-earned crypto. 😊

Image Courtesy: The Economic Times, India dated 3rd October 2023