When CEXs act as black boxes

When taking the first steps in the world of cryptocurrencies, centralized exchanges are almost always preferred. Thanks to their simple and intuitive user interface, the user or trader often can live an excellent user experience. But can you completely trust centralized exchanges in terms of security and privacy?

Yanda

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In this article, we will analyze the case of Luna reverted transactions by Crypto.com and whether centralized exchanges are really safe.

What happened to Terra-LUNA in Crypto.com?

The collapse of Terra-LUNA caused a death spiral in the whole crypto market. One of the most popular centralized exchanges Crypto.com, on May 12th, has shown its traders’ mispricing of the LUNA’s token. Due to the crash of Terra, customers who made LUNA transactions had their trades reversed and lost more funds due to this inconvenience. This event made users complain, and some traders claimed it stole their funds. In order to hush up rumours and controversies, Crypto.com released an official statement to its community explaining and clarifying the inconvenience.

To better understand the whole matter, taking a step back toward TerraLabs and Crypto.com is essential.

The case of TerraLabs

In our previous articles about DeFi and the violated principles, we talked about TerraLabs’s meltdown and the related backlashes that have affected the whole crypto industry.

The creator of the LUNAFoundation, Do Kwon, had bought billions of Bitcoin as a safeguard for UST and deployed more than $3B to defend the peg. He also caused downward pressure on the market, that in turn caused other large investors to sell off their Bitcoin shares. The unique result was that Bitcoin

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Yanda

Hybrid Finance protocol linking CeFi and DeFi