CryptoNewsZ sat down with Tristan Roosenthal, CEO of Centralex, following the recent launch of their ‘Custo-DeFi’ solution
CryptoNewsZ: Welcome to CryptoNewsZ, Tristan Roosenthal, our readers would love to know more about Centralex!
Centralex is a one-stop shop for cryptocurrency, with services covering everything from crypto trading and storage to banking, decentralized finance, and NFTs.
Our mission is to create an industry where anyone can benefit from the returns of crypto in a safe way, which is why consumer protection and ease of use are at the heart of everything we do.
CryptoNewsZ: According to you, what are the major problems in the crypto and blockchain space in 2022?
Before we founded Centralex, we had been trading crypto for years, and it was always painful. Finding a platform which is both secure and offers high liquidity and security is almost impossible, and investors currently have to deal with lengthy private keys, seed phrases, and ledgers all to interact with multiple wallets and unpredictable fees.
Even for experienced investors, this complexity can mean that funds are easily lost to mistakes or fraud – some $14 billion USD was lost in crypto-related scams in 2021. The complexity and lack of security can be a huge deterrent for new entrants considering entering cryptocurrency space, it has a steep learning curve, which can be at best, costly, and at worse, dangerous.
There’s also a problem with access to investment opportunities in crypto. Crypto was designed to open up investment opportunities to everyone, challenging a financial system where only the rich can get richer. However, we are starting to see exclusionary practices creep in. Take launchpads for example – these are designed to allow investors to access a project in the early stages of investment, but some of these require investors to hold thousands of dollars to participate. Unless we prioritize equal participation opportunities, we risk creating another financial system which faces the same issues as its predecessor.
CryptoNewsZ: What are your thoughts on crypto regulation and the current approaches out there?
Since its inception, crypto has been a challenge for regulators. Existing regulatory frameworks are mostly based on a paper-based world with country borders, both of which crypto was created to eliminate. And as the crypto ecosystem is constantly evolving, it’s hard to fully understand its nature and the risks that come with it, which makes building a regulatory framework difficult. Combine too many unknowns and too few regulations with pressure from embedded financial institutions which are under threat from crypto, and it’s no surprise that governments often take a heavy-handed approach. Countries
like Algeria, Bolivia, Ecuador, Nepal, Nigeria and China have opted for a total ban, while others like South Africa have prohibited cross border transfers, so every exchange that wants to operate in this jurisdiction needs to be registered as a South African company to allow regulators to monitor all transactions.
Unfortunately, this approach seems to be more about protecting the current financial system than the end investors. Not only does this stifle innovation, but it also misses the fact that while crypto regulation is a challenge, the blockchain technology which underpins it could be an incredibly powerful tool for regulators.
Gone are the days where you could use crypto to get away with things you shouldn’t be doing, such as money laundering and buying and selling illegal items. The compliance tools nowadays are very advanced – and because of the nature of crypto it is more transparent than the traditional markets – single transactions can be easily traced back to the bank account they came from. If regulators prioritize understanding, they will not only ensure consumers are protected from any potential crypto scams, but also could uncover a tool which creates a more transparent, easier to monitor regulatory environment.
CryptoNewsZ: Centralex seeS DeFi as the future of investment, where do you think the challenges are and what does the space need to do to reach the mainstream?
DeFi is definitely still the ‘Wild West’ of cryptocurrencies, it’s confusing, complicated, and losing funds is often seen as a rite of passage for traders who face scams, rug pulls, and the risk of lost or mistyped private keys. The majority of industry participants will have lost private keys and not been able to access funds, lost funds through mistyped keys or even given their private keys to the wrong people. Mistakes in setting up transactions are not only costly, but easy to make and often irreversible. It’s hardly a forgiving environment for experienced traders, let alone new investors.
CryptoNewsZ: If this is the case for seasoned investors, how can we expect DeFi to reach a mainstream audience?
For the space to mature, we need to find a third way, where regardless of whether you’re on- or off-chain, you can buy and sell crypto in the same way as you would use a traditional bank account, with a username and a password. This would mean that investors could access all the benefits of DeFi – such as high liquidity, being able to stake crypto assets and easily transfer funds, in a user-friendly, safe, and regulated environment. DeFi is the future, but if platforms don’t prioritize consumer protection and ease of use, it will never evolve beyond the realms of IT experts and large financial institutions.
CryptoNewsZ: What is “Custo-DeFi” and how do you think it fits into the future of crypto space?
We created Custo-DeFi to be the ‘Goldilocks solution’ for cryptocurrency. Currently, investors face a lose-lose decision between centralized exchanges. Go centralized and miss out on the majority of new and different assets, go decentralized and investors can access a huge range of offerings such as trading, lending, staking as well cryptocurrencies and NFTs, but risk losing funds to mistakes or fraud every time they complete a transaction.
Custo-DeFi is fully compliant and regulated, and means that regardless of whether you’re on or off-chain, you can buy and sell crypto in the same way as you would use a traditional bank account; with a username and a password. In order for the assets to be as secure as possible, user accounts are also protected with two factor authentication. Investors can access all the benefits of DeFi – such as high liquidity, being able to stake crypto assets and easily transfer funds, in a user-friendly, and safe environment. Rather than users having to remember long private keys, we partnered with enterprise-grade custody solutions provider Fireblocks on a multi-party computation solution for private keys. This not only allows private keys to be sharded and securely stored, but also means that there is no single point of failure as the key is split.
That was quite an insightful interview Tristan Roosenthal, thanks for your time, we wish you luck for your future projects!
