Why is it bad to leave crypto on exchanges?

[sulendra12]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

In 2019 Binance got hacked and they lost over millions because of that hack event, just imagine if they stole your money as well!

It's not just on Binance, any exchanges out there are facing the risk of getting hacked in the future if there is a chance to do so. We don't know it could be a month, a year, a decade we don't know what would happened on those exchanges. To be precise though, it's never been a safe place to store your money into someone's wallet for this case is the exchanges.

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[lienfaye]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

Are you not aware of exchanges hacking incident? Regardless of the reputation of the particular exchange the risk is always there either your finds might be stolen (compromise), freezing of account or hacking. Thats why its not advisable to store your crypto on exchanges for long and use it as your wallet. Like what other user's said, "not your keys, not your coins" so better to hold your bitcoin securely by holding your own private keys in a trusted wallet.

[RealMalatesta]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

reason why warning moved of not leaving your funds on exchanges is because of security reasons of the exchange. Because exchanges has their own coder's and programmers why computers wizards who specializes for decoding is interested of hacking any exchange that's gathered by funds. And i believe that this exchanges have competitor and it is possible to another to hack for getting more customers. I don't keep my coins in exchange because it can be hacked and the can not refund you. It is better Saving funds wallet like ELETRUM

You are on the right track but looking at the wrong places. If you are worried that a super wizard type of hacker could get into a secure exchange and steal your money, how do you feel about them hacking into your own computer? I mean doesn't that look easier?

If you think that some computer guy could hack into Binance for example which is as nearly impossible to hack as it gets and yet still could be hacked, then how do you believe that they can't hack into your computer. This means that you believe Binance is a bigger target for hackers and they wouldn't be worried about hacking into you, that's all you think, not that your own PC is safer, you just feel like they won't bother with you.

[arwin100]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

Depends on the exchange where you left your balances and if you leave it on binance for staking purposes then  think this is totally fine but take extra precaution upon using your account especially on phising sites since this is how people got compromise if they log their personal account on fake websites.

Also even if Binance is trusted exchange still there are chances that they will be hit by bigger exploits so the risk still there.

[romero121]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

Depends on the exchange where you left your balances and if you leave it on binance for staking purposes then  think this is totally fine but take extra precaution upon using your account especially on phising sites since this is how people got compromise if they log their personal account on fake websites.

Also even if Binance is trusted exchange still there are chances that they will be hit by bigger exploits so the risk still there.

In the past it is possible to see more such incidents of Exchanges and other wallet platforms going out of usage after collecting some funds. As said, Binance is a trusted platform. At the same time there is also possible chances of getting into hacks.

When someone deposit on unwanted exchanges, the user becomes a prey for them. Further with the personal details used those people will try to get the user into complete control. So, always staying with precaution is good with cryptocurrency holding.

[Oceat]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

Are you not aware of exchanges hacking incident? Regardless of the reputation of the particular exchange the risk is always there either your finds might be stolen (compromise), freezing of account or hacking. Thats why its not advisable to store your crypto on exchanges for long and use it as your wallet. Like what other user's said, "not your keys, not your coins" so better to hold your bitcoin securely by holding your own private keys in a trusted wallet.

OP probably was aware about that but his main concern is about the staking that's why he left it on the exchange. You can't do anything with your coins once you put it on stake but you do have a choice to either put it for long term or take it anytime you want.

True that there are lots of hacking incident in the past and it proves that no exchange's are safe for storing coins in long term. I would choose electrum or any hardware wallet if I do have some Bitcoin since you are the only one knows your private key.

[Smartvirus]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

Gets paid interest for living your coin on an exchange...! That's the first I've heard of it and I very much doubt it actually happens. Perhaps you could let me know what exchange could that be and there formula for calculating profits.

Well, the only way you get paid profit or one known way you get profit on coins is by staking the coin. That way, its used to provided liquidity and percentage are given on staked coin over time, as best as I know.

Meanwhile, exchanges and wallets ajve got there advantages depending on which end you choose to look at it. Either security or trading or both but one thing is for sue. When it comes to security, wallets are the best.

[The Great Kardoko]

Coinbase had notorious customer service issues with serious ghosting from their support staff and closing of unsolved tickets. Avg wait time was over a month when I was dealing with this. For those that wound up in situations that needed help, they often got stuck. Hacking is part of it but I was more concerned about losing access and having nobody to deal with. Coinbase is probably safer than most wallets at this point as long as you dont get yourself locked out. Their vault feature seems pretty safe to me.

[TheNineClub]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

We don't have to look if a certain exchange froze assets or got hacked in the past, but it's just a matter of having someone else handling your assets rather than keeping them on a hardware wallet for instance. We are all used to banks handling our money but in most fairly developed and democratic countries, banks and governments offer insurance that you will be compensated (to some extent) for your potential losses. If crypto exchanges had those checks in place, then there wouldn't be much issue in having your funds stored online.

[kaseygriffin]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

I haven't had any serious problems using CEXs, but you should be wary of CEXs that aren't very popular on the market. I have also heard of a few cases of Binance freezing users' accounts and they actually put a large amount of money on it, but most things will be resolved in just a matter of time. In my opinion, this space DEX is also popular now, so asset storage also needs to be more flexible. Don't focus too much on your assets. That's what I learned during my participation in the market. What exactly is this?

[KennyR]

Maybe if you use the funds on regular trading, then you can prefer to have the holdings in an exchange. That too not recommended, if the fund values big. Probably on a trusted platform like Binance it won't be a problem. If the plan is for long term holding, then never think of having it on any exchange or any of the third party platform.

Also don't fall for mere profit investing cryptocurrencies on third party service and multiplier schemes that assure with returns within a day. Even sometimes you might get directed to some scripts that show deposit and get doubled instantly. Down some positive reviews will be running as I deposited $100 and received $300 within few hours. With cryptocurrency in each and everything you need to be cautious.

[Dunamisx]

I have most of mine on an exchange because I'm getting paid interest.

Which of the exchanges? is it centralized or decentralized exchange? but either of the two i don't think its the exchange that is paying you but your coins can increase pretty good with increase in the current price of bitcoin and same vise versa, except if you opted in for trading, there you get profit base on your ability and price speculation skills and could loose or make profit as well.

Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

It possible, but am not saying it has happened to Binance, but we have several centralized exchanges that have past experience of hacks and one of them is bitfinex hack and this is the more reason why a decentralized exchange is more preferable than a centralized exchanges. Also there's no maximum privacy guaranteed in CEX, the only scenario i can admit the use of CEX is on trading but when it comes to investment it is more safer to use DEX.

[Maximo Spohn]

There will also be times when the exchange runs away. Money is your own money.
You can't imagine what could happen and cause your money to be lost. Even in large exchanges there are coin theft incidents.
It would be better for you to read more reports on this.

[traderethereum]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

You can leave your crypto on exchanges but you should know the risk and the consequences and know what already happened on the exchange history.
If you want to earn interest from your coins, you can use other apps such as Trust wallet, crypto.com wallet, and Exodus wallet so you will not risk the coin in the exchanges.
But if you still want to do that in Binance, you are free to continue.

[passwordnow]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

Yes, that's why people who have been in the market for so long will advise you not to keep your funds in exchanges. Even if you're earning interest on it, there's a likely that you won't be spared if hackers come to steal Binance's fund. Despite they have this "funds are safu", it's possible that they'll not cover it if the attack is large and they can no longer guarantee a refund.

[TheGreatPython]

I can understand that staking your coins on exchanges pays higher % which is enticing for someone who wants to make money out of their altcoins. Investors certainly wants to do that because of this offer and you can easily dump whenever the price goes ATH. They are however in danger when their accounts are going to be frozen by the exchange itself like what was said above. And it may just be a common practice in the coming years especially if you can;t provide where your funds come from.

I think there is a different way to stake and it's not always be inside the exchange but there are some that are happening inside the wallet. It can be safe because there are wallets that let you hold your keys with you. There are also platforms that lets you stake when you connect your wallet. You didn't deposit any of your coins, so your still in control of them.

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

I wonder if what you are doing is staking? And can you share the name of that exchange? Maybe we can also try it and we will see if it's profitable. Binance and other trusted exchange won't steal your coins but they can freeze your account only if you have made actions that are illegal and are against their rules but it is possible that they can get hacked. This is why it's risky or bad to store crypto on any exchanges.

[Ultegra134]

As someone who had stored funds in exchanges for quite a while, I'd advise you not to do it, despite not having any negative experiences myself. In 2017, I had abandoned a decent sum of money on Bitstamp and on an online wallet (BitGo), I recently recovered the accounts with no issues (back in early 2020 or late 2019, not sure), and my money was intact. However, as previous posters commented, it's a practice which is advised against, due to some hack incidents.

Personally, I believe it's fine to have money in exchanges, providing that you're actually using them for something (such as trading), don't leave them unattended without any specific reason, they're not a banking service.

[Gyfts]

I have most of mine on an exchange because I'm getting paid interest. Has there ever been a time when an exchange like Binance for example, steals your funds or gets hacked and people lost money?

You can hold your money on an exchange if it's a highly reputable exchange and if you trust it. Also, it should include you being ready to get your funds out of it if some new regulations arrive (like those for some Russians arrived from Binance today), willing to send documents that confirm your identity and address, and be sure you're not doing anything illegal (and technically, not paying taxes is illegal in places where cryptos are regulated). These are centralized services, so they can do a lot of stuff. If it's a very good exchange like Binance, it likely won't perform an exit scam, and will likely compensate losses in an even of a hack, but something can still happen. Overall, your money is just much safer in your personal wallet.

You can personally trust an exchange's security and still be locked out for some minor and obscure TOS violation, happens all the time with people holding their funds on 3rd party platforms even outside of crypto. You don't own any of the coin that you do not control the private keys for.

Those documentation forms can get rejected for any arbitrary reason. Plenty of payment platforms will freeze accounts and request documents, then continually reject any valid document submissions for whatever excuse they feel like giving. I wouldn't trust an exchange with a single satoshi.

[BD Crypto]

Binance is a centralized exchange and it can freeze your account if they find something fishy in your account. So it's not good to leave crypto on exchanges because they can be hacked/lost or can be locked.

[KaliLinux]

Binance is a centralized exchange and it can freeze your account if they find something fishy in your account. So it's not good to leave crypto on exchanges because they can be hacked/lost or can be locked.

I guess this has been established but also is that there are reasons why people leave their cryptos in exchanges even though not advisable and knowing all the risks involved which mostly involve staking for interest and quick access to trading for traders other than this, I don't see a reason why investors will want to leave their crypto in exchanges no matter how trustworthy but can still easily freeze your assets, be hacked or even outright scam by the exchange resulting to lose.