As cryptocurrency and blockchain technology continue to evolve, it’s no surprise of Canadian’s allure to the age of digital assets. However, here is what the experts in the space want those with crypto curiosity to know and recommend what to watch out for when entering this new, innovative and exciting space.
With over a decade of experience in the financial industry and compliance, Julia Baranovskaya of NDAX has shared some insights into the virtual asset industry and pointed out a number of essential aspects that everyone needs to be familiar with before investing in crypto. She shared her views with Fintech.ca on how to overcome challenges when investing in digital assets and what an effective regulatory regime that won’t hinder innovation looks like.
What makes NDAX different?
JB: NDAX’s mission is to streamline and simplify the approach to cryptocurrency trading in a secure space. Over four years ago, we looked to put a strong team together to offer something different and inject confidence into this emerging industry. In the early days, users struggled with getting funds in and out of cryptocurrency platforms. NDAX identified this issue and looked to establish a partnership with a Canadian bank for same-day deposit and withdrawal settlements with standards both retail clients expect and institutional clients require.
How to legitimize the crypto space for major investors?
JB: The last few years have seen several structural changes in the financial industry and anti-money laundering regulations in Canada and globally. Regulatory bodies are putting a great effort into addressing rapidly evolving financial products and regulations around them. Compliance policies need to help infuse investors with confidence, fuel the Canadian entrepreneurship spirit and prevent criminal activity. Ultimately, we need to regulate with efficacy, necessitating legislation compatible with digital assets.
How and why do scams happen in the crypto industry?
JB: The digital asset industry is not any different from the traditional financial industry when it comes to fraud. In fact, more fraudulent activity is conducted involving fiat, specifically USD, as it provides very little traceability and is widely accepted. With that being said, it is extremely important to have effective regulatory policies and a robust compliance approach for the financial industry as a whole. Implementing a framework for the industry participants will result in the ability of the end-user to access digital asset space in a regulated, safe and secure environment. Crypto and blockchain technology was designed to transact anonymously in a decentralized environment, but more centralized and regulated platforms appeared as the space evolved.
NDAX trading platform understands the importance of providing its services in the regulated environment and offering an extra level of security to the end-user, and with that in mind, it has built a strong digital asset storage infrastructure, added a number of security measures and established a support team that can assist the users and answer any questions they may have. We also require the users to add an additional level of security by enabling two-factor authentication and providing educational material and warning on what to look out for when it comes to fraud and crypto scams.
How does NDAX work with the government to enhance crypto policies?
JB: Constructive engagement and open communication with the Canadian regulators and financial institutions is the cornerstone of NDAX’s business philosophy. NDAX has always placed great importance on providing service in a regulated environment, which includes complete transparency, rigorous identification process, reporting, and ongoing reviews in accordance with all the applicable rules and regulations. NDAX is registered with the Financial Transactions and Reports and Analysis Centre of Canada (FINTRAC) and is currently in conversation with the other financial industry regulators.
What makes a good crypto trading platform for new investors?
JB: Whether you’re new to digital assets investing or an experienced trader, choosing a high-quality crypto trading platform is the first and the most important step. The market is quite saturated, making it difficult to choose the right platform that delivers on all fronts. A good crypto trading platform strives to constantly educate clients, offers secure and transparent service, features an intuitive easy-to-use user interface, and provides liquidity for the crypto assets offered.
How can we maintain the crypto space to be legitimate and trusted?
JB: Maintaining trust is a multilayered approach with many moving parts. From our perspective, trust comes with delivering good and consistent service. Due to our robust compliance policy, we have maintained a strong banking relationship for a number of years, effectively allowing users to deposit and withdraw Canadian dollars quickly and with no delay or interruption. NDAX has also established a framework that adheres to FINTRAC rules and regulations, which translates to services being offered and operating in a registered environment. We strive to provide a platform where users can trade safely and securely.
Another element that I can’t stress enough is educating clients about the nuts and bolts of digital asset space and the business potential of blockchain technology. Education is the key to developing trust and ensuring that the clients have all the information available to them before entering the crypto universe for the first time.
Is the regulatory approach necessary for the crypto industry to continue its growth?
JB: A well-balanced regulatory policy will help the growth of this exciting space and expand its untapped potential. Forward-thinking cryptocurrency regulations have been implemented in many jurisdictions, encouraging crypto-based innovations and efficiencies in how we view finance and commerce, particularly for cross-border transactions. It is integral that regulators develop tailored regulatory frameworks that create an environment conducive to adopting cryptocurrencies, the development of crypto-based investment vehicles and the technology behind it, alongside mechanisms of protecting the financial system’s integrity, security, and stability for all stakeholders.
What are the five things Canadians should know regarding security, compliance, and regulation in the crypto industry?
JB: Before entering the crypto space, do your research by performing extensive due diligence to truly understand who you’re dealing with. The crypto market is relatively a new investing space and is extremely volatile, and with that being said, I would encourage customers never to invest more money than they can afford to lose. Do your research on what you’re planning to invest in, evaluate the industry as a general, and look at the specifics of the crypto asset and its properties before investing. Avoid FOMO investing and do your due diligence to understand the platform you plan to use. Watch out for “get risk quick” scams; if something sounds too good to be true, most likely it is. And remember that education is the key to success.