Crypto Trading Platforms Mirror Casinos, Experts Warn

Cryptocurrency exchanges, once positioned as tools for financial empowerment, are now being likened to digital casinos. A peer-reviewed study from Concordia University researchers reveals that many major trading platforms employ game-like features designed to encourage risky behavior - drawing closer to the model of gambling than traditional investing.

From Investment to Entertainment

The study explores two major trends: financialisation—the embedding of financial logic into daily life—and gamblification, where financial activities mimic gaming experiences. Using BitMEX as a case study, researchers highlight how these platforms use tools like leverage and competitive elements to create an addictive, entertainment-driven environment.

BitMEX, for instance, allows traders to use up to 100x leverage and engages users with group competitions, digital “Guilds,” leaderboards, and prize contests. These features, the report argues, shift user focus from financial strategy to high-risk play. The result is significant profit for exchanges—often through the liquidation of overleveraged positions.

Risk by Design

Industry experts interviewed by SiGMA News say this approach is anything but accidental. “These features aren’t accidental. Exchanges make their money from transaction fees and liquidations, so they have every financial incentive to get people trading frequently and taking big risks,” said Claude du Toit, a growth strategist and crypto investor.

He also called out the industry’s tendency to frame risky behavior in financial terms. “The sneaky part is how they package all this activity in respectable financial language like ‘investing,’ ‘yield,’ and ‘strategy,’ which legitimises behaviour that, in substance, closely mirrors gambling.”

Justin d’Anethan, Head of Sales at crypto launch platform Liquifi, agrees the gamified tools increase user engagement, but warns of blurred risk signals. “Some exchanges do intentionally blur risk perceptions with gamified language and ambiguous rewards,” he said. “There’s a fine balance here: engagement should never come at the cost of clarity or investor caution.”

When User Loss Becomes Profit

The study also suggests that exchanges make the most money when users lose—especially on leveraged trades. While every trade generates a fee, sudden market movements often lead to user liquidations, which can be even more profitable for the platforms.

Du Toit acknowledges the ethical dilemma: “It may not be ethical to offer such services, but with proper education and a risk-based approach on the trading side, it becomes more sustainable.”

D’Anethan adds nuance, stating that the bigger issue is not user losses but unethical behavior. “Exchanges thrive on high trading volumes, not necessarily trader failures. Still, some unethical exchanges may leverage informational advantages against customers—an issue not unique to crypto.”

Should Crypto Be Regulated Like Gambling?

On whether crypto exchanges should be regulated like casinos, du Toit believes some trading types, like perpetual or highly leveraged trading, could fall under gambling-style rules. “Not all crypto activity needs to be treated as gambling though. Staking or long-term holding doesn’t pose the same risks,” he noted.

D’Anethan disagrees, advocating instead for regulations in line with traditional finance. “Crypto exchanges should undoubtedly face robust regulation... But I don’t see why anyone would say they should be regulated like gambling ventures or casinos.”

Source:

“Financialization x Gamblification: Key Concepts for the Critique of Cryptocurrency Exchanges”, criticalgamblingstudies.com Mar 24, 2025