Recent events should make you withdraw all your coins to your own wallet: Part 2

[Flexystar]

That’s poorly managed exchange and I feel sad for the employees who might have been working hard for them. It’s insane, if they had set up of “crypto” exchanger then they should have already forecasted that in the catastrophic event such as the current bearish market how they are going to manage the central funds, companies revenue and employee salaries. Everything should have been pre-planned before taking vigours actions.

As a m’n individual I have my own set of rules. If I’m investing into crypto then I definitely know crypto is going dump itself at some point and I will have to go to stealth mode! The actions are harsh.

In addition to this, they are reason for the traders aggression and sell off. Anyone who got the tip that they will be halting the withdrawals would instantly go transfer the funds.

Illogical to force that rule anyways, they will not be removed from the court orders considering the whole scenario and their deeds.

[1714179867]

1714179867

[1714179867]

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[Darker45]

Which is very easy to do, and the whole point of this thread: Withdraw your coins to your own wallet. Then, just wait.

~snip~

Like it or not, most retail investors are impulsive people who look to bitcoin or any other investment for a magical way out of their shitty lives, and their way of thinking doesn't usually involve a boring strategy along the lines of: buy bitcoin, store it in a hardware wallet and don't worry about the price in 5 years.

That's right. I've also observed that myself. Rather than safely keep them with their private keys, they sent them in all kinds of centralized sites and fake decentralized finance platforms and fake decentralized exchanges. They invested them in gambling sites, lending platforms, liquidity pools, and so forth. I mean, many must have also profited from it, but things could go wrong anytime. Crypto's history doesn't fall short of all kinds of events that should serve as warnings.

I don't know, perhaps some are really in a hurry to get rich. Or perhaps they're simply greedy.

[odolvlobo]

It has just come to my attention that BlockFi is closed today for the Juneteenth holiday, and that will not be processing any withdrawals: https://nitter.net/BlockFi/status/1537105514399670273

Why? Has the bitcoin network shutdown? Have miners stopped mining? No, of course not. Seems very much like they are stalling for time ...

FUD

What is the withdrawal process?

Published September 8, 2020

Crypto withdrawals are subject to a security hold and processed the next business day after that hold clears. If the request is placed before 8PM EST (00:00 UTC), it will be processed the next business day. If the request is placed after 8PM EST (00:00 UTC), it will be processed in two business days. Withdrawals are processed between 12PM-8PM EST and are only processed on business days. ...

[Welsh]

people should only use exchanges the very day they want to buy/sell. and then get the funds out same day. dont rely on central services as a custodian wallet mid-long term.

Right. Although, I'd go a stretch further than that. To mitigate the risk as much as possible, you should be selling in increments, rather than all at once. Fees might be more depending on the exchange, and whether they charge you to deposit, as well as obviously fees for selling, and potentially withdrawing. However, if a exchange is that restrictive I'd probably recommend not using them anyway.

Anyway, back to the point; selling in increments at least mitigates the risk if the exchange seizes trading during the time you're depositing, even if only for until you buy/sell. I know a lot of users aren't going to have the patience for that, but I'd seriously consider doing it considering the amount of exchanges that have pulled this sort of thing now.

FUD

What is the withdrawal process?

Published September 8, 2020

Crypto withdrawals are subject to a security hold and processed the next business day after that hold clears. If the request is placed before 8PM EST (00:00 UTC), it will be processed the next business day. If the request is placed after 8PM EST (00:00 UTC), it will be processed in two business days. Withdrawals are processed between 12PM-8PM EST and are only processed on business days. ...

I think this cements my point even more. Alright, my recommendation might not be suitable for traders looking to make the most money for their buck, but it's the safest way. Personally, I wouldn't be using an exchange that requires holding your coins for security checks.

How many times have we read posts asking how they could earn from their Bitcoin?

Almost, always a indicator of someone who doesn't really understand Bitcoin, and things it should be leveraged to earn more. Don't get me wrong, there will be people who understand the risk of that, and will actually benefit from it. However, it does make me uncomfortable a little bit when I see newer users asking these sort of questions.

[hugeblack]

These platforms have some conditions in their TOS, which make their position in court better than many users. They also know the slow pace of judicial procedures you need a lot of money and therefore they will not hesitate to close your account if they find any problem or violation of the terms of service (even if They let you use it)

Some platforms leave high withdrawal fees to force the user to leave his money, so look for a coin with low withdrawal fees^[1], exchange your coins to that coin, send it to a platform that gives you lower  BTC withdrawal fees, withdraw your bitcoins.

[1] https://withdrawalfees.com/

[o_e_l_e_o]

Personally, I wouldn't be using an exchange that requires holding your coins for security checks.

I mean, it's obviously bullshit. Unless they are asking you to provide a selfie holding a piece of paper with your withdrawal address on it every time you want to withdraw (which they obviously aren't) any "security checks" can be automated and take place in a few seconds. Things like checking your IPs, checking for suspicious log ins or account activity, etc. They can require 2FA codes or a link sent to your email, again which can be automated to happen at any time of day or night and take a few seconds. Plenty of other exchanges and services manage it. Holding coins for two business days for "security checks" (which could be up to 6 actual days over weekends and holidays) is obviously just to give them as much warning as possible for withdrawals since they run a fractional reserve with apparently a very small amount in reserve. Explains why they've just had to take out a $250 million loan to cover all the customers who are withdrawing in the light of the Celsius insolvency.

Some platforms leave high withdrawal fees to force the user to leave his money, so look for a coin with low withdrawal fees^[1], exchange your coins to that coin, send it to a platform that gives you lower  BTC withdrawal fees, withdraw your bitcoins.

There is no situation in which I should have to swap bitcoin for some inferior altcoin just so I don't get hammered with withdrawal fees. A fee of 1 sat/vbyte is sufficient to get confirmed within the hour >90% of the time. Exchanges charging tens of thousands of sats for something which should cost ~200 sats are stealing from you. Being forced to pay exchange fees to exchange to an altcoin you don't want just so you can withdraw it is no better.

[savetheFORUM]

The problem with some is that they simply can't wait. They simply can't just patiently wait. It seems a lot simply cannot relax. They cannot stay put. They're antsy with their Bitcoin. They have ants in their pants!

How many times have we read posts asking how they could earn from their Bitcoin? How many times have we heard people saying they'd rather invest their Bitcoin and earn a little than just HODL it and earn nothing?

A lot are saying they want to make the most of their Bitcoin. They just can't let it sleep in their cold storage. They'd rather stake or lend them because they're not spending them anyway; they're keeping them long-term anyway.

I hope people will finally learn from this!

Those who act like that are not a true long term investor but they just invest for fun or only to try if they really can earn something on hodling bitcoins as on what they heard and see. They are those people that keeps on watching their balance at all times and they seem to be uneasy. If there are dumps in the price they are also the first one that will panic and they can sell their possessions.

In hodling, you can actually earn something, the same as when they lend or stake their bitcoins on some platforms but the goodness of doing it, is that you are the ones who manage it. You have your keys and seeds with you so it is much safer.

[Welsh]

Personally, I wouldn't be using an exchange that requires holding your coins for security checks.

I mean, it's obviously bullshit. Unless they are asking you to provide a selfie holding a piece of paper with your withdrawal address on it every time you want to withdraw (which they obviously aren't) any "security checks" can be automated and take place in a few seconds. Things like checking your IPs, checking for suspicious log ins or account activity, etc. They can require 2FA codes or a link sent to your email, again which can be automated to happen at any time of day or night and take a few seconds. Plenty of other exchanges and services manage it. Holding coins for two business days for "security checks" (which could be up to 6 actual days over weekends and holidays) is obviously just to give them as much warning as possible for withdrawals since they run a fractional reserve with apparently a very small amount in reserve. Explains why they've just had to take out a $250 million loan to cover all the customers who are withdrawing in the light of the Celsius insolvency.

Even if the exchange was objectively better in every aspect, I'd avoid it out of principle. I've also talked about it before, but if an exchange basically didn't allow you, and forced you to remove your coins from their platform, i.e doesn't have a wallet for long term storage (long term being any more than 24 hours) I'd have much more respect for a platform that did that. Since, a the mere fact you advertise users to use your wallet software, is poor security practice to begin with.

Yeah, there's hardly any security checks that need to be done. It sounds awfully alike a bank, where they need to do these checks. The thing is, a lot of the checks are easier with fiat. It just stinks of insurance for me. If they were in troubling times, I bet they wouldn't look after their customers, and just fold like the others before them.

[o_e_l_e_o]

I've also talked about it before, but if an exchange basically didn't allow you, and forced you to remove your coins from their platform, i.e doesn't have a wallet for long term storage (long term being any more than 24 hours) I'd have much more respect for a platform that did that.

Plenty of DEXs effectively do this, and have no way to store your coins with them. I don't believe any centralized exchanges this, though.

It sounds awfully alike a bank, where they need to do these checks.

Bingo. Using these platforms is simply replacing an insured and relatively safe fiat bank with an uninsured and wildly risky crypto bank.


It's now emerging that in return for their $250 million bailout of BlockFi, FTX will be acquiring a stake in BlockFi. I can't really think of a bigger red flag than when the entity holding your coins is auctioning off themselves to remain solvent.

[ABCbits]

I've also talked about it before, but if an exchange basically didn't allow you, and forced you to remove your coins from their platform, i.e doesn't have a wallet for long term storage (long term being any more than 24 hours) I'd have much more respect for a platform that did that.

Plenty of DEXs effectively do this, and have no way to store your coins with them. I don't believe any centralized exchanges this, though.

AFAIK there aren't CEX which force you to withdraw your coin. But IIRC there are few CEX (don't remember which one) which charge fee if you store coin for long time on their service. Although it's likely they do it to earn more profit rather than convincing people to use non-custodial wallet. Kraken CEO also being honest they cannot protect you if government is after you[1].

[1] https://twitter.com/jespow/status/1494462097161220104?t=EWO80zZlf6wZp4HpkXQEhA&s=19

[buwaytress]

AFAIK there aren't CEX which force you to withdraw your coin. But IIRC there are few CEX (don't remember which one) which charge fee if you store coin for long time on their service. Although it's likely they do it to earn more profit rather than convincing people to use non-custodial wallet. Kraken CEO also being honest they cannot protect you if government is after you[1].

I think, and I could be wrong, it was either Poloniex or Bitfinex which did this. Used to get emails about it for crapcoins I'd have (yes, yes, I was a noob in 2016 too).

They called it a maintenance fee, but I believed it wasn't for profit. It was only for coins that were low network usage that they were thinking to delist (since maintaining the wallets when nodes were frequently down was a hassle). They'd only levy the fee on dormant coins, the idea was to get as many users as possible to withdraw out so they could just delist and close down the maintenance.

One wallet turned CEX I definitely remember was Exodus. A few years back they decided to drop Dogecoin and if you didn't withdraw yours before upgrading to their new version, you'd simply not see your Doge anymore.

[o_e_l_e_o]

They called it a maintenance fee

Which is obviously nonsense. Once they've set up the necessary systems to create a wallet for a specific coin which can handle deposits and withdrawals for customers, it takes absolutely no effort on their end other than to let the software continue to run. Just another one of the many ways that centralized exchanges rip off their users.

One wallet turned CEX I definitely remember was Exodus. A few years back they decided to drop Dogecoin and if you didn't withdraw yours before upgrading to their new version, you'd simply not see your Doge anymore.

Really? Did the wallet have a seed phrase you could export and recover your coins somewhere else? Cause otherwise that's just outright theft.

[ABCbits]

AFAIK there aren't CEX which force you to withdraw your coin. But IIRC there are few CEX (don't remember which one) which charge fee if you store coin for long time on their service. Although it's likely they do it to earn more profit rather than convincing people to use non-custodial wallet. Kraken CEO also being honest they cannot protect you if government is after you[1].

I think, and I could be wrong, it was either Poloniex or Bitfinex which did this. Used to get emails about it for crapcoins I'd have (yes, yes, I was a noob in 2016 too).

They called it a maintenance fee, but I believed it wasn't for profit. It was only for coins that were low network usage that they were thinking to delist (since maintaining the wallets when nodes were frequently down was a hassle). They'd only levy the fee on dormant coins, the idea was to get as many users as possible to withdraw out so they could just delist and close down the maintenance.

Just did quick search and it's poloniex which have such fee[1]. They call it "administrative fee", although it's not clear the duration to be classified as dormant account or whether it applies to all coin. BitFinex don't have such fee according to their FAQ[2].

One wallet turned CEX I definitely remember was Exodus. A few years back they decided to drop Dogecoin and if you didn't withdraw yours before upgrading to their new version, you'd simply not see your Doge anymore.

Are you sure you remember it correctly? Their website still show page for Dogecoin[3].

[1] https://support.poloniexus.com/hc/en-us/articles/360035354512-Poloniex-US-FAQ
[2] https://support.bitfinex.com/hc/en-us/articles/213919589-What-fees-does-Bitfinex-charge
[3] https://www.exodus.com/dogecoin-wallet

[buwaytress]

Which is obviously nonsense. Once they've set up the necessary systems to create a wallet for a specific coin which can handle deposits and withdrawals for customers, it takes absolutely no effort on their end other than to let the software continue to run. Just another one of the many ways that centralized exchanges rip off their users.

Indeed. My first direct experience with some of these shenanigans was a centralised wallet run by a mining company think it was called Eohash or Eobot? Small one, they sold mining rigs but also had a wallet, kinda like the antpool dashboard. I actually had quite a bit of coinage there as 2016 you could still do some shitcoin pow with reasonable results (okay Monero's not a shitcoin but nevermind). Had what I'd say was an impressive balance in the run up to 2017 but I left it sitting there, not realising they'd suddenly implemented a monthly % maintenance fee which wiped it all out by the time I DID go in to see a year or so later. They've closed down.

One wallet turned CEX I definitely remember was Exodus. A few years back they decided to drop Dogecoin and if you didn't withdraw yours before upgrading to their new version, you'd simply not see your Doge anymore.

Really? Did the wallet have a seed phrase you could export and recover your coins somewhere else? Cause otherwise that's just outright theft.

The only way to get the seed phrase was to use the older version (which I did) but if you were unlucky to upgrade and forget you ever had Doge, like I guess a lot of people did, too bad. You're right, it was outright theft and it actually caused some small furore from the Dogecoin "devs" at the time -- I didn't follow too much and had I better forum skills I would reference the thread I recall discussing it. This reddit thread seems to explain it in some detail (the comments) if you're interested.

Are you sure you remember it correctly? Their website still show page for Dogecoin[3].

100% sure. I used Exodus for most alts I had (at first I did QT on almost everything but that became a terrible hassle, doge was one of the worst IMO) and that event was actually pretty stealth mode, I only found out WHEN I downloaded new version then.

You can see the reddit thread I put in this post for more detail and context. The Doge code maintainers got into a row after that, as did some Exodus users (they or I didn't lose any coins but we know for sure n00bs caught unawares would of course never realise this theft).

I note Exodus today seems a very different wallet, I see it as an exchange actually now it has a trading function and integrated card/bank option to buy.

[o_e_l_e_o]

It's now emerging that in return for their $250 million bailout of BlockFi, FTX will be acquiring a stake in BlockFi. I can't really think of a bigger red flag than when the entity holding your coins is auctioning off themselves to remain solvent.

Latest update to this story: https://www.coindesk.com/business/2022/06/25/morgan-creek-is-trying-to-counter-ftxs-blockfi-bailout-leaked-call-shows/

The $250 million bailout is set to wipe out all other BlockFi shareholders, as it gives FTX the ability to buy out BlockFi at close to no cost. One of these shareholders - Morgan Creek Digital - are now trying to come up with their own rescue package for BlockFi to stop this from happening. BlockFi apparently receive a number of other bailout offers, all of which would have used clients funds to secure the loan from the lender.

So, it doesn't really matter which way you look at this - BlockFi are in trouble and if you have any coins on their platform then you are at a significant risk of losing everything.

[Z-tight]

o_e_l_e_o here is another recent event why people should only hold their coins in their own wallet and stay away from centralized or third party crypto services, though this is a slightly different case, but it remains the same outcome which is people losing their coins. A crypto firm called Harmony has been hit by attackers, and they have lost $100 million dollars in digital coins to the attackers. Harmony is a centralized blockchain bridge that helps people transfer their coins between different blockchains, but people that use it have to give up the ownership of their coins in the process, and that means: it is not your keys; it is not your coins!
https://www.washingtonpost.com/business/2022/06/24/crypto-hack-harmony-horizon/

[odolvlobo]

It's now emerging that in return for their $250 million bailout of BlockFi, FTX will be acquiring a stake in BlockFi. I can't really think of a bigger red flag than when the entity holding your coins is auctioning off themselves to remain solvent.

Latest update to this story: https://www.coindesk.com/business/2022/06/25/morgan-creek-is-trying-to-counter-ftxs-blockfi-bailout-leaked-call-shows/
The $250 million bailout is set to wipe out all other BlockFi shareholders, as it gives FTX the ability to buy out BlockFi at close to no cost. One of these shareholders - Morgan Creek Digital - are now trying to come up with their own rescue package for BlockFi to stop this from happening. BlockFi apparently receive a number of other bailout offers, all of which would have used clients funds to secure the loan from the lender.
So, it doesn't really matter which way you look at this - BlockFi are in trouble and if you have any coins on their platform then you are at a significant risk of losing everything.

FTX's bailout of blockfi is concerning, but what bothers me more are the withdrawal fees. It costs $25 to withdraw stablecoins, for example. If you have $1000 in blockfi, it will take 5 months of interest to pay for the withdrawal. Also, I think many people will be withdrawing all of their money before the fees start and that will create even more problems for blockfi.

[KingsDen]

people should only use exchanges the very day they want to buy/sell. and then get the funds out same day.

How possible or how achievable is this advice to day traders? Is it possible that at the end of every day trade, they convert all the coins they traded to one coin and send to their non custodain wallet, the then next day they repeat the process. It is not something that is simple to do.

We know that exchanges are not safe, but the first step is to search for a more reputable exchange and then avoid giving out coins for high risky trades. By this only temporary funds for trade will be on exchanges.

[o_e_l_e_o]

https://www.forbes.com/sites/stevenehrlich/2022/06/28/bankman-fried-some-crypto-exchanges-already-secretly-insolvent/

Pretty concerning statement from the CEO of FTX here. I wonder if he is just speculating in the same way we all expect other exchanges are running fractional reserve systems and bordering on insolvency, or if other exchanges have already approached him looking for bailouts and he's turned them down.

After $485 million to Voyager and $250 million to BlockFi, wonder who he'll bail out next?

Who are the people dumb enough to still have their coins on these platforms?

[o_e_l_e_o]

Bump.

Looks like I was wrong about BlockFi being the next to collapse, as despite a $485 million bailout from FTX just 10 days ago, Voyager are next to freeze all their customers' accounts, essentially holding their money hostage: https://www.investvoyager.com/blog/voyager-update-july-1-2022/.

According to their filed reports (https://www.newswire.ca/news-releases/voyager-digital-provides-market-update-851734302.html), out of $1.12 billion in assets they had loaned out to generate interest, $654 million of those were with Three Arrows Capital, who recently went bankrupt. That's almost 60%. You've got to wonder why they are handing out non-collateralized loans of 60% of their assets. And you've got to wonder why people believed that 10% returns was somehow sustainable. I suspect the answer is greed in both cases.

And looks like BlockFi have just increased their FTX funded bailout from $250 million to $400 million: https://blockfi.com/a-message-from-our-founders-july-2022. And with that comes an option for FTX to buy BlockFi at just $240 million or even less. BlockFi used to be valued at $4.5 billion, and is now potentially being sold at 5% of that. They are sinking fast.