Analyst Martyparty says over 250 CEXs and 100+ off-chain platforms are unregulated for asset rehypothecation.
Lack of transparency could be contributing to long-term price suppression and market distortion.
The analyst suggests these centralized entities undermine the core principles of decentralization.
There is a growing concern about centralized platforms possibly distorting crypto market prices. These concerns center around rehypothecation, a practice that remains largely unregulated. Without oversight, derivative crypto assets may outnumber the real ones, creating risks for retail traders and long-term investors.
Centralized Platforms Under Scrutiny
Concerns about crypto price suppression have resurfaced following a post on X by crypto analyst Martyparty. He claimed that centralized exchanges (CEXs), Layer 2 (L2) sequencers, and permissioned bridges contribute to market manipulation.
The core issue lies in their use of customer-deposited assets for, essentially reusing the same assets to back multiple obligations or synthetic tokens.
Related: South Korea to Investigate AVAIL Altcoin Over Price Manipulation Concerns
According to Martyparty, t…
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