It's time to grow up.
At least that's the message Apolo Ohno, eight-time U.S. Olympic medalist and the founder of a new cryptocurrency exchange called Hybrid Block, has for the industry. While the speed skating champion is so confident he sees cryptocurrency as a "long-term play," he believes the state of global exchange ecosystem he's entering is a mess to say the least.
Not only are there issues that need to be resolved before the industry hits its next wave of maturity – education, transparency, liquidity and regulation – there's also rampant fraud.
Speaking at the Blockchain Unbound conference in Puerto Rico last week, Ohno signaled out wash trading – or the practice of buying and selling the same financial instrument to create artificial volume – as rampant. Not only is it practiced by individual investors, he claimed it's even done by individual exchanges that are cheating their customers.
But while wash trading is an illegal activity in more traditional markets, without a firm regulatory structure for the cryptocurrency markets, many partake in it, Ohno said.
"The amount of wash trading and front-running … you'd probably be very scared to keep any money in cryptocurrency," he said.
Still, that's something that Ohno has set his sights on changing, and in his talk, he put forward the idea the challenges could be solved with collaboration and discipline.
He told the audience:
"I want people to know what they're buying and why they're getting involved.
In one of his first public speeches on the subject, Ohno didn't pull punches either, discussing the names of specific exchanges he believes are operating correctly.
Indeed in one monologue, Ohno compared the volume seen at the U.S. exchange Gemini with those of international exchanges. While volume is generally higher abroad, Ohno said, he believes that Gemini's volume is likely to be reflective of real trading.
Elsewhere, Ohno shared the stage with Alex Wearn, the CEO of decentralized exchange Aurora, and Biser Dimitrov, the technical director at BlockEx, which provides a platform for cryptocurrency exchanges, and both agreed wash trading is a problem for the industry.
"There are some exchanges out there that have bad reputations … but people are making money so they're hesitant to call them on it," Wearn said.
But if Ohno's statements seemed to focus on offering advice to potential entrepreneurs, he was quick to note that he doesn't see crypto as a competitive sport.
"We're so early in the industry that we're so collaborative," he said, adding:
"Think about how many people in the world don't own cryptocurrency."
Decentralizing the exchange
Still, Ohno was also insistent that coming regulation will do much to shape that landscape.
With rumors flying about a large-scale probe by the SEC into initial coin offerings (ICOs) and the exchanges that offer them, regulation was a hot topic during many panels at the conference.
While Ohno said that regulation is needed to a certain degree, he does worry that U.S. regulators could stifle innovation. In an effort to stop regulators from pursuing a cumbersome regulatory framework, Ohno said that the industry should seek to self-regulate.
But, he's still confident the technology can prevail even in that disaster situation. Ohno not only is focusing on the Asian market – "If you're not targeting Asia, you're missing out," he said – he's also interested in high-tech alternatives to today's offerings.
"If shit really hits the fan, we've got these decentralized exchanges you can't shut them down," he added.
Overall, while it's still a work in progress, Ohno believes there's still time.
"We live in a sphere that's so small. Our voices are growing and becoming stronger, but if my dad and our parents don't know what [cryptocurrency] is, then we're not at mass adoption," Ohno said, adding:
"And we need [mass adoption] if you want to make a true impact."
Apolo Ohno at Blockchain Unbound image via CoinDesk