Author: flowie, ChainCatcher
After OKX DEX suspended its services, on-chain players led by P Xiao began to rush to find alternatives.
Some smart DEXes have also started to pull out all the stops to try to catch this "huge fortune", and a battle for traffic has begun.
But compared to the fight for traffic, this shutdown event may once again make the exchanges, or even all Crypto protocols, deeply reflect on a more severe dilemma - how to smoothly land under the trend of stricter compliance?
Why did OKX DEX suspend its services?
Although OKX DEX claimed that the service suspension was due to service upgrades, current market clues seem to point to EU regulation.
Last week, Bloomberg reported that in the $150 million Bybit theft case, hackers used OKX wallets to cross-chain transfer and launder the funds, involving up to $100 million, which led the EU to also investigate OKX while investigating the case.
Although the OKX CEO explicitly responded on Twitter that the statement in the Bloomberg report that "hackers washed about $100 million in cryptocurrency they stole through the OKX Web3 platform" was inaccurate and misleading, and stated that OKX had also made multiple freezes after the attack and provided technical operational support.
But with the sudden shutdown of the DEX service today, many crypto KOLs have pointed to the EU regulatory investigation.
AB Kuai.Dong also said that after the shutdown of OKX DEX, it is reported that many exchanges are also working overtime to rectify their businesses, separating the exchange and wallet businesses and operating entities.
Competitors scrambling, who can catch this huge user flow?
OKX had occupied a huge market share through its first-mover advantage and massive investment of manpower and resources. But within a few hours of the DEX service shutdown, it was immediately swarmed by competitors.
Binance was quick to act this time. Binance co-founder He Yi interacted with major KOLs, recommending Binance Wallet.
Binance also tweeted: "No time to explain, just update your Binance to the latest version, something big is happening," and then Binance directly announced that there would be zero trading fees for 6 months for wallets.
In the new version of Binance, the Binance alpha section assets can be traded on the Binance main site, and the asset page also has an "alpha" sub-version.
Bitget, which has not integrated its wallet and exchange, actually has an advantage in this regulatory turmoil. Bitget Wallet also quickly responded by launching a one-week $90,000 prize pool recharge incentive campaign.
As a hot product in this round of the meme cycle, GMGN, although it has mainly attracted PC users in the past, also has a mobile version, and has become one of the "alternatives" recommended by the community.
In addition, compared to the exchange wallets' efforts on fee waivers or bonus incentives, Particle Network's decentralized trading product UniversalX may focus on KOL recommendations.
Many KOLs on Twitter have been pushing UniversalX as an alternative to OKX DEX, with many including detailed usage tutorials, and the popular slogan "Use UX, can A8".
But from the current feedback of some users, the product experience of some "alternatives" still has many "pain points" and has a lot of room for improvement.
For example, today's high-profile Binance and UniversalX, a Twitter user said that although the trading on the Binance alpha section was smooth, they were squeezed out of 1200U; UniversalX has also been criticized many times for its unsmooth trading.
Compliance is difficult, how should the squeezed CEX land?
The mainstream exchanges led by OKX and Binance have invested heavily in compliance in the past.
Just in 2024, OKX's compliance team added more than 300 people, and by the end of 2024, the global compliance team will be close to 5,005 people. OKX also has a team of more than 150 people focused on on-chain investigations, responsible for the deployment of anti-money laundering and sanctions tools.
Binance has also spent a huge amount of money on compliance, with compliance spending exceeding $200 million in mid-2024, and Binance's compliance team is expected to have 700 people by the end of 2024.
Major exchanges have also been vying for compliance licenses around the world. But OKX, which may be investigated by the EU, is still one of only two exchanges (the other is Crypto.com) to have obtained the EU's Crypto Asset Markets (MiCA) license, but is still under regulatory scrutiny.
Perhaps because CEX business has always faced compliance issues, OKX has taken the lead in trying to strategically deploy on-chain through wallets, which has also led to imitation by many other exchanges.
But from the OKX DEX shutdown turmoil, for exchanges to fully comply with their core business, while being permissionless and decentralized on-chain, they still face regulatory challenges.
For exchanges, caught between the demand for global expansion and the contradictions of regulatory compliance in different regions, the real dilemma of how to land in compliance remains.
Exchanges or their founders are also seeking various ways to seek "landing".
Binance, which has been hit hard by regulators, has recently chosen to seek local protection by embracing the sovereign wealth fund of the UAE to cope with compliance pressure.
U.S. domestic exchanges like Coinbase, Karken, and Gemini are seeking sanctuary through political donations on the one hand, and actively seeking IPOs, with Karken and Gemini recently rumored to be preparing IPO plans.
Previously, Huobi founder Li Lin, after clearing out Chinese users, sold all of his Huobi shares to Hong Kong's Bayu Capital to make a clean exit.
But this shutdown of OKX DEX not only rings another alarm bell for exchanges, but also makes any Crypto protocol with a centralized entity need to consider the potential regulatory pressure.
