Anything you see centralization, there are pretty much the same risks involved. It doesn't matter if it is an exchange or any other service like that. They always comply with the governments and won't need that much pressure either, as long as the simplest request comes they jump to obey. As I said this is not just for CEX either, we saw how the privacy oriented tool called Wasabi wallet obeyed and started censoring transactions in their CoinJoin coordinator!
They will always comply with the regulation of the government because they know if they don't certain restrictions will be imposed on them and hurdles will be passed on with their system.But more importantly they also don't care about users as they have setup these CEX for primary motives of profit and it doesn't matter if comes at the cost of privacy of the users.
The things is there is no privacy at the first part due to all the kYc norms and then more and more documentation depending on the withdrawal so they acts same like central banks agencies who are sensoring you for each and every transaction.Recently we have seen Binance also restricting Russian users to trade/deposit above €10k under the EU sanction and they have clearly stated they will work in accordance with the government.
Now this selling of users data came as of no surprise to me seeing the past working of these centralised exchange.According to me having your funds over CEX is similar to like giving someone access to your lockers having your funds and they can anytime go rogue or be hacked.So be safe from them.
I would hardly call censorship a "pro". Sure, they may use that power to seize some hacked coins, but they also use it to seize coins that governments tell them to, that trigger one of their arbitrary algorithms, that they deem to be too risky, sometimes entirely by mistake, and so on. If they can censor someone else, then they can censor you. If they can steal other people's coins, then they can steal your coins.
They are government puppets and can track any transaction and block the funds if they wish to do so as they already possess the keys for them so actually they own the funds on your behalf which is far more risky than you could imagine.
I trust Binance
This over self belief on them could be dangerous and you sound like one of their team members defending them on security issues but have some research man.
I mean, they've already been hacked for thousands of their customers' KYC data and then lied about it. So that's just not true.
Yes that's the case people ignore these things because they are running successfully and leading in the industry but that doesn't protect them from hacks and the funds gone will be of users not owners.
Hackers stole 7,000 bitcoin from major cryptocurrency exchange Binance, the platform said.
And speaking of KYC you don't know how your documents are being exploited by them as we have already heard about data being sold on dark web which you never know and the risk lies on your end.The facts don't lie.
so what I'm saying in essence is that binance have high security data like apple industry, it's hard before apple release their customers data for you, because it's very obvious that if they do, it will lead to elimination of their platform or degradation of their exchange.
These exchange needs to be equipped with latest technology but the problem again lies with the centralised control and how can you blindly trust them?
See this is their security model architecture :
The exchange architecture includes CCSS and ISO/ICO_27001:2013 security protocols. For account security, the platform offers users the option to activate Google Authenticator and 2FA to verify withdrawals and security modifications.
But do you think it's hard for hackers to crack these and have access of your funds.The only thing is they can track it but you know hackers are also smart.So why put yourself in such situations in the first end?
You have no idea how good or bad their security is. It has been breached many times in the past, resulting in both stolen coins and stolen data.
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