When a quartet of big markets firms were looking at bitcoin in 2022, they saw a lot to like: record highs, regular Crypto markets are maturing rapidly – a process that some have likened to the industry growing out of short trousers and into“big boy pants”. In some areas, though, there’s catching up still to do. Crypto might have pulled on its metaphorical chinos, but insiders say the industry’s risk management – despite signs of improvement –remains patchy.
Risk.net has analysed the top 44 global crypto exchanges based on a ranking from Kaiko, the largest independent provider of crypto data. Of the 44 firms, only nine have a chief risk officer (CRO) in place.
As the crypto market enters its period of maturation, a growing number of participants now believe that growth and risk management are symbiotic.
John Fennell, CRO of 10-ranking crypto firm EDX Markets, says: “To manage the balance that exists between growing the business and driving commercial success, a firm’s chief risk officer and its risk management framework are critical tools for independent checks and balances.”
Xue at Axis agrees. Small and medium-sized firms under pressure to grow rapidly are those most at risk of a slip-up he tells Risk.net: “The teams and businesses that move more slowly, ultimately move faster. It’s the players that do things right the first time [that] end up paving the way for longevity.”