Alicia Kao, Kucoin’s managing director, has emphasized the importance of security and regulation in the digital asset space.
Rapid Response to Security Breaches Helps Restore User Trust
Although hacks and breaches have hindered the adoption of digital assets, Alicia Kao, Kucoin’s managing director, said the rapid response to incidents, combined with transparency in sharing information, helps restore confidence. Kao believes maintaining a secure trading environment is crucial for supporting the continued adoption of digital assets.
In written responses shared with Bitcoin.com News, Kao suggested that major centralized exchanges have been more successful in making their platforms less vulnerable to cyberattacks than their decentralized finance (defi) counterparts. She attributes this to the deployment of multilayered security protocols and partnerships with cybersecurity firms. Kao said defi platforms will continue to be targeted by hackers unless they adopt a similar security approach.
Regarding cryptocurrency exchange regulation, Kao said proactive engagement with regulators from various jurisdictions, as Kucoin is doing, helps “foster collaborative policymaking.” Engaging with regulators also enhances trust in the ecosystem, allowing retail and institutional users to trade with confidence.
Kao also shared her thoughts on the U.S. elections’ impact on the crypto market and the importance of education in onboarding new users. Her full responses are below.
Bitcoin.com News (BCN): Barring the Wazirx hack, breaches and security incidents against major centralized exchanges have decreased in recent years. On the other hand, cybercriminals seem to be (successfully) targeting decentralized finance (defi) platforms more frequently. From your perspective, what does this apparent shift by hackers toward defi platforms indicate about the security systems of centralized exchanges?
Alicia Kao (AK): The shift in cyberattack strategies suggests that security protocols within established exchanges have advanced considerably. For instance, some exchanges, including KuCoin have prioritized protecting user funds through various mechanisms, including robust multi-layered security protocols and partnerships with cybersecurity firms, on-chain tracking and monitoring systems etc. This emphasis has made it challenging for bad actors to breach centralized platforms, pushing some to target newer, less-secured DeFi platforms.
BCN: To what extent do you think incidents of hacks and breaches are hindering efforts to achieve widespread digital asset adoption?
AK: Security breaches can understandably deter new users, but the response from exchanges to such incidents has strengthened trust within the industry. The rapid response to security concerns—combined with transparency in sharing information on incidents and implementing solutions—helps restore confidence in crypto assets. Ensuring a secure environment for trading is foundational to supporting the continued adoption of digital assets by demonstrating a commitment to safety.
BCN: The recent Chainalysis Crypto Adoption Index indicated that Central and Southern Asia and Oceania lead global crypto adoption. In your opinion, why is adoption surging in this region?
AK: There has been a notable surge in user engagement from Central and Southern Asia and Oceania, driven by an expansive mobile network and a burgeoning interest in alternative financial services. Educational initiatives and localized services have been pivotal in tapping into this eagerness, further propelled by progressive regulatory frameworks in these regions.
BCN: Although regulation, or the lack thereof, is often cited as a key hurdle to digital asset adoption, places like Dubai, Singapore, and Hong Kong have shown that a balanced approach to overseeing digital assets can result in a win-win outcome. Startups and innovators are seemingly encouraged to set up operations in these countries because of regulatory clarity, while users and investors feel confident that authorities will protect their interests. What else, besides regulatory clarity, do you think needs to be done to attract more users and Web3 entrepreneurs to this region?
AK: While regulatory clarity is crucial, exchanges also invest in user education and partnership-building within Web3 ecosystems to foster a holistic crypto community. Educational programs and initiatives provide students, early adopters, and even advanced experts with both foundational and high-level blockchain knowledge. Building local partnerships with educational institutions and financial entities further encourages innovation while supporting user protection and engagement. KuCoin has launched various platforms and initiatives to promote such causes, including KuCoin Campus, Learn and Earn, routinely published research reports and etc.
BCN: Earlier this year, bitcoin (BTC) surged, fueled primarily by the exchange traded funds (ETF) mania. This narrative eventually faded, but BTC remained above $50,000 for much of the year. Now we’re seeing another surge and this time it is possibly linked to the recent U.S. elections. Based on your observations, is it institutions or retail investors driving the current upswing? And how sustainable do you think this bull run is?
AK: The recent surge in Bitcoin’s value to new historical highs can be largely attributed to improvements in the global liquidity environment. Changes in U.S. Federal Reserve monetary policy, along with coordinated efforts by central banks worldwide, have provided substantial liquidity support, boosting the prices of risk assets. Additionally, political factors have played a significant role: the positive stance of Trump’s campaign team on cryptocurrencies, endorsements from tech leaders like Musk, and related events have heightened institutional investors’ interest in digital assets, fueling investment enthusiasm and driving up Bitcoin prices.
BCN: Regulation is a major issue for cryptocurrency exchanges. Many exchanges avoid certain jurisdictions with potentially large markets because of what they consider overbearing regulatory standards. In other cases, authorities, despite not providing clear regulatory frameworks, have targeted crypto exchanges. What is your perspective on the current regulatory relationship between responsible agencies in major economies and cryptocurrency exchanges?
AK: The current regulatory framework is still evolving. Regulatory bodies are increasingly recognizing the need to establish clear guidelines to ensure the security and stability of the cryptocurrency market while fostering innovation.
KuCoin engages proactively with regulators across jurisdictions to foster collaborative policy-making. We are FIU-licensed in India and comply with KYC and AML standards in numerous countries, showcasing our dedication to responsible operation. We have gained 5 licenses around the globe with more conversations ongoing. By cooperating with regulators, KuCoin aims to enhance trust in the ecosystem, allowing both retail and institutional users to trade with confidence in well-regulated markets.
BCN: As an industry veteran, you likely strongly believe in the importance of proper education, given the relative newness of the cryptocurrency industry. What basic and affordable educational resources can you recommend to newcomers trying to navigate the cryptocurrency industry?
AK: To help newcomers, KuCoin offers resources like Learn & Earn, which gamifies education, and regular webinars on key crypto topics. Our monthly research reports, country reports, and ongoing publications of technical analysis content showcased that we believe that “education makes mastery”. Additionally, users can access the KuCoin Blog and attend live sessions with experts on our platform. These resources ensure users have access to accessible and relevant content, helping them navigate the complexities of crypto investment responsibly.