Newbies: Don't use centralized exchanges!

[BlackHatCoiner]

Whether you're here to learn more about Bitcoin, or just to trade and make a few bucks, please read the text below.

Translations: Greek, German

Besides an innovative payment system which works without borders, more efficiently and practically, Bitcoin is here to make you sound. It's giving you what corrupted governments try constantly to take away from you: Financial sovereignty and self-control.

But, do not expect it to make you gain these alone. Bitcoin is just a currency, which means it's apolitical. All these ideals come from the fact that you've taken the time to understand the drawbacks of the traditional banking system and how disastrous a central point of failure can be.

Don't use a centralized exchange, for a number of reasons.

• You're about to be dictated of where your money is allowed to go. [1][2]
• You're about to be charged unbearably high fees. [3]
• You're about to be "blackmailed" to deliver private information to have your coins unfreezed. [4]
• You're about to be censored. [5]
• You have no privacy. [6]
• The exchange can go bankrupt and you lose everything. [7]
• You're making the Bitcoin economy susceptible to manipulation. [8]

[1] Coinbase says it’s blocking 25,000 Russia-linked crypto addresses
[2] Binance To Ban Singapore Users From Crypto Trading And Buying On Its Global Platform
[3] Binance Earns More Than $20,000 per Day Overcharging on Transaction Fees
[4] popular exchange extortion and blackmail
[5] Re: Centralised Exchanges are the Biggest Enemies of Bitcoin
[6] Goodbye, privacy, goodbye, it was nice while it lasted.
[7] When Crypto-Exchanges Go Broke, You’ll Lose It All
[8] Re: Newbies: Don't use centralized exchanges!

Instead, exchange decentrally.

We encourage the use of decentralized exchanges such as Bisq (or others) that operate transparently. There's no KYC, no danger from centralized exchanges' hacks, no oppression by a third party; it's as private, secure and censorship-resistant as it could be. Escape the arbitrary ruling enforcement of the corrupted Binance, Coinbase, KuCoin etc., today!

You defend your rights the moment you start using it. Educate yourself: Why Bisq exists.

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[sheenshane]

It's indeed a good reminder to newbies.

This was the same scenario in a short documentary film on Netflix that was newly released, titled "Trust no One" and here's someone making a thread (a mysterious exit scam of a centralized exchange).  It reminds us that centralized exchange is not good to entrust our funds or let the third party hold our crypto asset, we don't know when they have a plan to exit and run away together with our money, they can also make a plan not suspecting by the public that they steal money from their users and it could be an inside job acting like they are a victim of a scam.

Don't use a centralized exchange or store your crypto in the long term.  It's a great thread to motivate others not to use CEXs.

[Charles-Tim]

We encourage the use of decentralized exchanges such as Bisq (or others) that operate transparently. There's no KYC, no danger from centralized exchanges' hacks, no oppression by a third party; it's as private, secure and censorship-resistant as it could be. Escape the arbitrary ruling enforcement of the corrupted Binance, Coinbase, KuCoin etc., today!

Bisq is the most decentralized exchange that is yet existing, other reputed ones like Hodlhodl and Localcryptos are also far better than using a centralized exchange. Localcryptos is recently having high trading volume among P2P exchanges.

According to the link you pasted above, https://kycnot.me/, there are centralized exchanges among, example is Kucoin, Kucoin do not require for KYC, but can force any of their customers to provide KYC at any time or they will freeze the customer's account. Some others that are listed like ChangeNow are instant exchange that can sometimes also force someone that is making use of their service to provide KYC once the person has already sent bitcoin or altcoin to an address provided by the instant exchange, they will not exchange the coin for him unless he do KYC as instructed by them.

[BlackHatCoiner]

According to the link you pasted above, https://kycnot.me/, there are centralized exchanges among, example is Kucoin, Kucoin do not require for KYC, but can force any of their customers to provide KYC at any time or they will freeze the customer's account.

I changed the link to a list of P2P/no-KYC exchanges.

[aysg76]

Exactly there are so many reasons to avoid these centralised exchange as your funds are not at all safe over these exchanges due to the reasons you have mentioned.Like recently we have seen coinbase imposing restrictions to it's customer that will have to complete the KYC and even provide the full details of the recipient of money that also above $1000 CAD only and ends to privacy of the users.So.stop using these exchanges as there is no security at all of your funds.

The thing about these exchanges is first of all they are in possession of your keys so you at the first end have the full probability of losing the funds and talking about safety is another aspect in our mind.At this time Major exchange are having huge volumes but there are many chances of scams,hacks and they own becoming scam at one point.

Bisq is the most decentralized exchange that is yet existing, other reputed ones like Hodlhodl and Localcryptos are also far better than using a centralized exchange. Localcryptos is recently having high trading volume among P2P exchanges.

According to the link you pasted above, https://kycnot.me/, there are centralized exchanges among, example is Kucoin, Kucoin do not require for KYC, but can force any of their customers to provide KYC at any time or they will freeze the customer's account. Some others that are listed like ChangeNow are instant exchange that can sometimes also force someone that is making use of their service to provide KYC once the person has already sent bitcoin or altcoin to an address provided by the instant exchange, they will not exchange the coin for him unless he do KYC as instructed by them.

At this time also they implement partial KYC like you don't need to undergo any KYC for withdrawal but if they suspect something suspicious they may force it on you so you don't know when they will be under radar.They are obligated by the government agencies to provide full disclosure whenever they require so they will implement on the customer.

The other problem is they are using third party software services to store the data who then can be hacked and the full maillist of users is compromised who gets scam mail from exchanges.In recent times we have seen lot of such cases that are subject to such hacks and the users looses funds in the end.The best way is to store them offline with proper backup of your seeds and funds will be safe.

[Cookdata]

What a perfect time!  Centralized exchanges are thieves, you will think they are cool until you get caught by their nonsense policy.
I woke up this morning with a notification about a trending post on Bitcoin subreddit^[1] on How Changelly exchange has refused to release a bitcoin onto user balance, they asked him to undergo a KYC before the bitcoin will be released but after doing the verification, they still never released the bitcoin and I was just asking my self why would the user use such an exchange? I Learned that he was misled by this Twitter Bio.



https://mobile.twitter.com/changelly_team

The user was misled by the headline, convinced and registered an account and has deposited a bitcoin all because he saw non-custodial and by that, I think he wasn't knowledgeable enough to know that he should have access to private keys or seed phrase and nothing like KYC will be required by such exchange.

Changelly is not a Non-custodial exchange, You can see from the Image that bitcoin is not his because he cannot spend it or authorised a transaction as he didn't hold the private key to the exchange. He didn't lose just his bitcoin, he lost documents about his information and money to them. They can do anything with those documents without his knowledge.
This is one way of losing your documents and bitcoin that are meant to be private to a group of people that run centralized exchanges, stay away from them.



[1] https://www.reddit.com/r/Bitcoin/comments/u04zex/changelly_kyc_scam_they_are_holding_my_19800_btc/

[tranthidung]

• Why KYC is extremely dangerous – and useless
• PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets
• USDT banned addresses
• KYCnot.me is a website on which you can find non-KYC exchanges. Make sure you check their trading volume and take it into consideration whether you will use it or not

[Coyster]

o_e_l_e_o raise similar concerns in this thread some couple of weeks ago, still on centralized exchanges and the enormous possibility of loss of funds when you leave your coins in centralized exchanges, and also the mammoth possibility of your data being exposed in the black market when a hack happens, and with the amount of hacks that has happened on centralized exchanges you always have that feeling there is another one waiting in the wings.

I actually do hope people heed to all of this warning as it indeed cannot be overemphasized, one must not have to wait till they are a victim before they understand that their security should always come first, even if it (their security) is not so convenient for them to set up and maintain (they must do it by all means possible).

[Charles-Tim]

I woke up this morning with a notification about a trending post on Bitcoin subreddit^[1] on How Changelly exchange has refused to release a bitcoin onto user balance,

Exchanges like ChangeNow and Changelley are instant exchanges, even you can make use of their service on noncustododial wallets like Coinomi and Atomic wallet (not recommendimg this wallets as they are close source, not also recommendimg instant exchanges), people are only fooled, thinking they exchange from one coin to another in a way no KYC needed for it. But it happen like this:

The instant exchange will provide you an address that belong to the instant exchange (some people can think it belongs to another person that want to exchange coin too, but not).

You will send the coin you want to exchange to the instant exchange address with the amount you want to exchange. (Take note of this)

The instant exchange will send your the coin you exchange for to another address on your wallet.

You should take note that you send coin to the instant exchange address first before you were sent the coin you exchange to, they have the private key to the address, ones you send your coin to the instant exchange address, the instant exchange can decide to force someone to provide his/her KYC or thy will not send any coin you wanted to exchange to while your coin is already with the instant exchange.

Instant exchanges are centralized, but still better than KYC exchanges that users will have to provide KYC even before making use of the exchange service, which can lead to data breach. But to have privacy, all centralized exchanges be it instant exchange or not are not all recommendable.

• PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets
• USDT banned addresses

Some people can think they are using noncustododial wallet, not knowing that Tether Limited can freeze USDT on noncustododial wallet. Using USDT means someone is not having full privacy because Tether Limited can decide to freeze the coin of any users even on noncustododial wallet.

[Cuda911]

It's not as if they will ban and sit on the assets of the people from various countries they don't want to support anymore, binance isn't like that, they will give you time to move out your assets and they will notify all account owners too.

[cryptoaddictchie]

We encourage the use of decentralized exchanges such as Bisq (or others) that operate transparently. There's no KYC, no danger from centralized exchanges' hacks, no oppression by a third party; it's as private, secure and censorship-resistant as it could be. Escape the arbitrary ruling enforcement of the corrupted Binance, Coinbase, KuCoin etc., today!

Dude how about if we wanted to trade altcoins with good volume? By any means the thread is good as it advise to avoid centralized exchange, compared to stock which is centralized, Im sure a lot of people doing the same thing when using a stock brokerage platform.

I myself concern with the privacy or data breached. But Ive been into trading, and I like to play with altcoins, especially on Binance. Yes Im aware of the risk. But cant settled for that of bisq which offer a direct, bitcoin and usd trading. Plus the use of p2p system on Binance is pretty useful for convenience. Im not disagreeing with the thought but its rather a security aspect. But Im sure you could consider also those newbies wanted to be involve in trading and not bitcoin alone. Which lacks the perfect trading set up for bisq alone.

[hugeblack]

You have listed logical reasons why a person is moving away from centralized platforms, but your definition of decentralized platforms is not accurate, or you did not define them directly.

90% of decentralized exchanges claim that they are decentralized, but they are centralized in one point or another, for example:

 - No KYC: KYC is not the problem, but rather who manages the money. Can you manage it away from the platform or do you need the platform?
 - No hack: This may be true, but the decentralized platforms are software and there may be some bugs that may ends you lose your money^[1].
 - Privacy: Privacy is a valuable thing, so even decentralized platforms do not give you 100% privacy.

In short, do not look at things from a black and white perspective.

[1] Hacker Exploits Flaw in Decentralized Bitcoin Exchange Bisq

[o_e_l_e_o]

The other problem is they are using third party software services to store the data who then can be hacked and the full maillist of users is compromised who gets scam mail from exchanges.

Having your email address leaked by a centralized exchange, although extremely common, should be the least of your worries. Most big exchanges, from Coinbase to Binance, have either sold or been hacked for far more personal information than that, including full KYC data, selfies, passports, driver's licenses, and so on. When your identity ends up on the dark net and then used to commit financial fraud, having your email address leaked will be irrelevant.

It's not as if they will ban and sit on the assets of the people from various countries they don't want to support anymore, binance isn't like that, they will give you time to move out your assets and they will notify all account owners too.

Except when they don't, which is often. If they decide your activity is suspicious, or they don't like where your deposit came from, or they don't like where your withdrawals are going, or you triggered one of their arbitrary secret algorithms, or 100 other reasons, your account will be frozen and your coins confiscated unless you bow to their ridiculous privacy invasion. And even if you do, there is still no guarantee you'll actually get your coins back.

[MidNite36]

Good point but what about trading? This is one of the reasons why centralised exchanges make a lotta sense, I can't do trading on pancakswap or uni swap for example, imagine cex disappearing from crypto space right now what do you think will happen?.. CEX have a major role to play and they will always exists.

[Charles-Tim]

Good point but what about trading? This is one of the reasons why centralised exchanges make a lotta sense, I can't do trading on pancakswap or uni swap for example, imagine cex disappearing from crypto space right now what do you think will happen?.. CEX have a major role to play and they will always exists.

Some people are not traders, they are just bitcoin holders and users in a way they prefer not to provide KYC, once KYC is required, they avoid, they also prefer not to go for centralized services as they want full control of their coins.

For scalping, day trading, derivatives and other margin trading, traders do not have much option than to go for centralized exchange. But some centralized exchanges do not require KYC up to certain withdrawal limited, like Kucoin and OKX exchanges which can be the option some traders can first go for but they are still centralized exchanges. The fact still always remain, that centralized exchanges do not give you full control, the exchange have the full control, your coin can be seized, your account can be freezed and many other inconvenience can come up while still also the exchange can be hacked.

[istiak2277]

There are some drawbacks to both types of exchange. You have already mentioned what they are for centralized exchange, but what about decentralized ones? A decentralized exchange is full of scam tokens, which are a hard task for a newbie in crypto to identify. Also, how are you going to move your money to your bank account without a centralized exchange? You have to convert it to fiat to spend it right?

[o_e_l_e_o]

A decentralized exchange is full of scam tokens, which are a hard task for a newbie in crypto to identify.

The existence of scam tokens is not an argument against decentralized exchanges. Plenty of centralized exchanges peddle all the same scams. Newbies should be sticking to bitcoin anyway.

Also, how are you going to move your money to your bank account without a centralized exchange?

By any method you choose with the person you are trading with. Bank transfer, cash deposits, Western Union, Zelle, Advanced Cash, MoneyGram, cash in person, PayPal, TransferWise, Venmo, Cash App, the list is endless.

You have to convert it to fiat to spend it right?

Not at all. You can spend bitcoin directly with a wide variety of merchants and retailers.

[pakhitheboss]

A decentralized exchange is full of scam tokens, which are a hard task for a newbie in crypto to identify.

Agreed there are a lot of scam tokens on a decentralized exchange and this is where you need to learn in order to identify them. Use the search bar and you will find multiple topics discussing the same.

Bank transfer, cash deposits, Western Union, Zelle, Advanced Cash, MoneyGram, cash in person, PayPal, TransferWise, Venmo, Cash App, the list is endless.

The best option is to trade on a DEX and use a P2P service to convert your crypto assets to fiat. That will save you from a lot of fees.

Not at all. You can spend bitcoin directly with a wide variety of merchants and retailers.

Agreed you can spend directly Bitcoin and other selected cryptocurrencies at the store but it also depends on the country that you are living in. You do can spend it online but that is also saturated.

[Charles-Tim]

A decentralized exchange is full of scam tokens, which are a hard task for a newbie in crypto to identify.

Agreed there are a lot of scam tokens on a decentralized exchange and this is where you need to learn in order to identify them. Use the search bar and you will find multiple topics discussing the same.

It depends on the decentralized exchanges, this thread is not focusing on any other decentralized exchanges than decentralized exchanges that you can convert bitcoin to fiat like Bisq, Localcryptos and Hodlhodl. Unlike altcoin decentralized exchanges that you can not exchange to fiat and full of scam tokens.

[Doan9269]

A decentralized exchange is full of scam tokens

I think this is just your own thought or assumption, this is an experience you can get from either CEX or DEx and what determines it result is the level of your research

how are you going to move your money to your bank account without a centralized exchange? You have to convert it to fiat to spend it right?

here you can make use of no KYC p2p exchanges, but even with that, we have some businesses that are accepting direct payment in bitcoin, we the example of a coffee shop that accept bitcoin for payment, gifts and donations in crypto in Ukraine and citizens school in Dubai also implemented that just to mention few.