I've been thinking that for years, and the Bitfinex affair just shows I was right.
I'm a trader, trading cryptocurrencies with other cryptocurrencies, and sometimes, I'm also using exchanges, to convert cryptocurrencies to fiat currencies. I want to use trading services which do not offer exchange services, and I want to use exchange services which do make trades between cryptocurrencies.
And I don't want any stablecoins. Bitfinex was a great service, it's that Tether thing which may sink them.
So, you're saying altcoin exchanges shouldn't interface with fiat? And fiat exchanges shouldn't offer altcoin markets? That's a tough sell when the business model of these services = trading commissions. More market listings and trading options means more profit.
I do feel more comfortable using services like Binance and BitMEX because they don't touch fiat currencies. I lost some money when BTC-e got taken down a couple years ago and things have never felt the same since.
Bitfinex has felt like a sitting duck to me for a long time. It's not necessarily Tether -- although Tether made their effect on the market much more expansive -- but the problem of trying to remain unregulated and shrouded in secrecy, hiding their accounts behind shell companies and possibly skirting their AML obligations. This was bound to end with getting money frozen by regulators.
