Dyma Budorin - Dream of Transparent and Secure CEX - TOKEN2049 Dubai 2025

It probably would be better if I had the topic dream of transparent and secure sex. But unfortunately, I'm going to throw on you right now all the problems of centralized exchanges. Um, who I am? I'm Dim Abuan. I'm 38.

I moved to Abu Dhabi because we work with regulators. I'm CEO of Hakin. have eight years experience at Deoid and now I'm in the boards member of few organizations across crypto world. Um people know about hacking probably as a security blockchain auditor. Yeah, we we do it from 2017.

We work with a lot of companies and of course exchanges. We're probably the biggest security auditor of exchanges, proof of reserve, all the stuff. And I know what I'm talking about also because we have a token from 2017 and I understand all these problems. So what is the current stage? So the current stage of exchanges is that they are still the most powerful.

I would say they are the black holes of our crypto space because they absorb all liquidity absolutely and transparent but the fact is that they do have a power. There were attempts and I personally participated when we formed the alliance with coin market cap and we pushed the order book and adjust the trading volume metrics at CMC. Then we push security rankings on coin gecka and they're still there but it's definitely not enough but what is really matters for them is that institutions are coming and they are still not prepared. also taking into account the security breaches the access unfortunately they are very far behind from centralized exchange in terms of people and volume and it's the number of volume the number of users of dexes didn't grow since the defi summer and opposite it's fallen and unfortunately the uh dexes are not it's very uh dexes are not used by the people because people are not trusting themselves. They better give at uh they better buy trust from centralized exchange so that if something will happen with their crypto they blame them not themselves and don't go into depression.

But yeah, Treify is coming here. We see all our cycle that people don't want to build complicated stuff. People want to build transactional business and make money from commissions. And this is what all the traditional world is all about. And they of course see this sweet pie of centralized exchanges and they want to to grab it.

And yeah, that's a stable coin. Just as a quick reminder that we are already dominating by stable coins as an industry and people are way more using stable coins rather than crypto and this this is the reality we're losing. Um so I would like to throw on you 10 problems very big problems and maybe some solutions. So this is the list of the problems and I'm sure that centralized exchange will not solve it. They are not solving it after so many years because they making a lot of money and they want to do it to stay absolutely unregulated very black and but maybe you know so first financial accountability it's like no crypto exchange in the world is doing a proper financial audit of their on the global level of their company.

So there are so nobody knows if any if Binance is solvent or not. Nobody. We all know from different experiences that exchanges are touching user deposits and they are playing with their assets without their constant and that's the fact. Proof of reserve is kind of working on this problem and by bits because they were doing proof of reserves they were able to convince the community that after this mega hack they stayed solvent and that's a good thing but in reality we still like proof of reserve doesn't go deeply into liability side of exchange so we don't know the exact ratio of their capital another thing is that what I already said is that a lot of exchanges they are touching crypto deposits and my approximation from our analysis is we have only about 20 to 40 exchanges maximum in the space all the other ones they don't have this liquidity that they show on coin gecko coin market cap they take user deposits they send it to another exchange they mirror the liquidity they show uh their graphs and everybody is thinking that they are like uh deep uh deep liquidity provider but in fact they're just a broker. So second problem is that we have to have a definition of what is the exchange what is a broker and coin market cap coin geka have to do it and they have to run tests so that people are not fooled.

Second is digital asset on chain verification and monitoring. Guess what uh who knows how the circulation supply is calculated and what is the number of this circulation supply? Who knows? Nobody knows. In fact, it's just the Excel spreadsheet that has been submitted to Coin Geek Coin Market Cup with and if it's uh filled in accurately then like Coin Geck say okay your supply is verified or CMC no offense to them.

It's a very difficult job to do but that's the reality. Even you can check right now for example ATOM uh Cosmos token at coin gecko coin market cap they have different supply and this we are not even touching the bridges supply verification which is absolutely nightmare. No one knows whether the bridges are working correctly and the supply is not inflated. This is a huge problem. Nobody is an elephant in the room.

Nobody's talking about nobody's shaking it. No regulator, no exchange, nothing. But this is an exchange obligation to do that so that people are not fooled. Second uh third investor disclosure. Oh my god.

Can you imagine if you trade on traditional stock market that you don't know investors of uh public companies, you don't know the uh price where when they entered and basically you don't know when they are selling. So this is impossible and this all leads to opportunity for founders exchanges to do manipulations and to make huge selloffs um to the community and that's that's something that is basically killing our liquidity and giving untransparency to our industry. This has to change. Verified user metrics that's my favorite one. So um I really we have a token and I want to know how many holders of my token is there on centralized exchange on cool and gate whatever you name it and I cannot get this information why even I as a founder I requested many times how many token holders there is silence and why people should not know it is essential you have to know not only about the token holder count you need to know how many active traders are there from your token holders on this particular exchange.

How what is the average entry price? What is the token longevity? How what is the length of the average token holding? And of course the distribution between whales and uh token holders and small small players. And this is what we do have in Dexis and when you uh not when you trade it like this in this centralized manner but sexis you don't have it.

We need to change it. Security framework. Obviously, so many things were said about it. But the reality is that people think that the pentest or bug bount is enough. But this is not enough.

We have also operational security breaches. We have supply chain security things like we did like we saw in bybit. And of course there are also blockchain native risks that's appear from um node implementation and so on. and um white paper risks. IT control audits.

This is a reminder for uh those who missed Quadriga CX and what actually happened, why they were like first they played the drama that the guy died and they he lost the private keys. In the reality, the guy just uh was changing his own balance of BTC like putting the number that he holds a lot of BTC and selling it into USD and euro whatever Canadian dollar and then withdrawing the fiat money and this is how he evaporated all the reserves of exchanges and evaporated from the world and this is can be done by proper IT controls audits over the platforms over all global uh level of exchange live monitoring of crypto of black crypto is very crucial. It's like we still like after buy bit hack you see the do you see this graph it's like 28% of the stolen funds have gone fully fully like dark it's like you cannot trace it and the other one even if they are traceable they still like uh some of them they went through mixers and all of this was done because these big companies that are about to protect and climb monitor and create the blacklist there are too afraid of the lawsuits. If they blacklist some uh big funds and this will damage them in some financial uh way just because uh there is a uh wallet poison and attack and hackers can understand the algorithms of chain analysis whatever company and they can send dirt to crypto there and this will create a house. But the reality again like we as an industry we don't we should not be afraid of the lawsuits.

We should implement the live monitoring and properly in every single block we should blacklist new wallets. Yeah, that was about it and and the last slide. So, uh I entered crypto world in 2017. Hacking was we were a cyber security company and we just uh we fall in love in the ICO concept. We uh made the pitch deck.

We went a pitching competition and we won 33 bitcoins and from the stage guy offered us some money and with the promise that we're going to make the ICO. So we did it and I did it because in Ukraine where I'm from we don't have stock market like nothing zero there is no and the whole idea that's a person with his idea from Ukraine from Bangladesh from whatever he can offer his idea to to the world and he can be founded through crypto and then this crypto can be traded at secondary market this this is fascinating to me this is why I'm in this industry why I keep building making money on security audits and investing them in cooperating with regulators with whoever but to fix this problem with centralized exchanges because this is what is killing us. So what in my opinion will happen next. So if if centralized exchanges will not make a very serious transformation step at least like four or five things that I mentioned right now, they going to be uh destroyed by the big guys from Wall Street who will start their own exchanges with the fair rules and with the regulatory compliance. And this regulatory compliance will get out of the current market leaders of crypto world and they going to put and they going to make impossible to deal with the stable coins with fiats and so on and the liquidity will just go away from there.

So my conclusion is and if you think that this all makes sense and if you have exchange founders just give them them them a link to this presentation or whatever and propose them to think differently and to think ahead because the time is is clicking and they uh are at risk to disappear in very very uh close time. Thank you for attention.