Coins on an exchange, any exchange, are never safe

[fenican]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

[Accardo]

It's good to see recurring threads about this same mistake to maintain awareness. But, the more it appears on forums and medias people still keep blind ears to it. And such people pay the price when the exchange collapses or go bankrupt. Also, they'll be the first to complain about how scammy cryptocurrency is to them. Certainly, with the information in circulation about the risks involved in keeping funds on exchanges the victims of these bankruptcy and disputes can be said to have self imposed the problem they are facing.

[electronicash]

the traders keep theirs on exchanges because they are on the lookout to make money on opportunities like the FTX bankruptcy. you wanna sell fast when the price plummets going to $16k, that's the advantage but they are also risking when the exchange pauses withdrawals.

if you don't care of prices going down and you want to be on the safer side, take your coins out the exchange.

[Dunamisx]

with so many examples of failures, do people continue to keep their money on these?

Despite several occasions of giving warnings about how centralized exchanges could place a risk on users from having access to their coins or leaving them bare to data leakage without any form of privacy, yet this exchanges finds thier ways in to newbies who couldn't bot differentiate thier difference, while most often those that engage on trading also make use of the centralized exchanges, but leaving their little amount of asset in them, these centralized exchanges may still exists but their relevance would have drop drastically whereby many of them could have cease from operations just like in the case of the example you stated

[sulendra12]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

Your wallet have a risk for getting hacked. It doesn't matter if it's from exchange wallet or your own local wallet, there is a chance for something happens if you do something wrong during certain date. The way of people or companies to secure the wallet are another factor to determine which is safest or not. Treat everything has a risk and you will become really careful when doing anything especially involved with money.

[boyptc]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

Yes.

It's still that there are many people that do keep their funds on exchanges. And they don't know until when an issue about them is going to pop just like what happened for FTX.

While there's no issue yet, they're just leaving it there as if there's really no problem at all. But it's true that, you never hold your keys there if you allow them to keep it for you.

[BIT-BENDER]

One of the reason i can think of as to why people still let their coin be on an exchange is that they are ignorant. I have a friend who is new into Crypto-currency and still lacking some knowledge, he knows about bitcoin and how he can buy coin on exchanges like binance but still don't understand the dangers of leaving his coin on the exchange. He has lots of coins on his Binance account not only I told him about the dangers.

I think we can tell people about the dangers of leaving their coins on exchanges and by this we can help reduce such illiteracy.

[teosanru]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

Honestly I am starting to believe this as well now. I fact I would say buying coins is not safe at all. First LUNA and now FTT, it really looks as if Cryptos are made of nothing but a bubble, a fictitious demand created on a dramatic idea which exists only in theory when it faces a slightest of practical challenge it just bursts. I feel one should only hold decentralised Cryptos only and not even touch the Cryptos where exposure of a single entity is more than 20-30%. I feel this is the only way to be safe in this market otherwise be ready to lose your hard earned money.

[OgNasty]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

A lot of people don't trust themselves to hold onto their own funds.  They figure the people running the exchanges are professionals and wouldn't do dumb things with their money.  FTX showed that isn't the case.  It's amazing to me that Sam managed to get himself more than 15 billion dollars in wealth and it still wasn't enough to keep him happy and stop him from doing stupid things with customer funds.  It absolutely amazes me.  The amount of damage that has been done to the industry by these selfish get rich with other people's money types is immeasurable.  If the average person cannot trust anyone to custody their funds for them, crypto can't go mainstream.  The same reason people keep their money in a bank instead of under their mattress. 

[BlackHatCoiner]

People are irresponsible and uneducated. Pretty much that, summarily. To do self-custody, one needs to spend some hours to study how things work, how wallet software work, learn security tactics, ask / search for questions, have questions etc.

FTX showed that isn't the case.  It's amazing to me that Sam managed to get himself more than 15 billion dollars in wealth and it still wasn't enough to keep him happy and stop him from doing stupid things with customer funds.

I can't believe this idiot is so rich: https://twitter.com/DU09BTC/status/1586269255162478593

[rby]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

The fact is that some people are very big risk takers, they don't let their coin be on the wallet where they cannot use it to try their luck in some coins.
They always look out for opportunities in exchanges where they could increase their portfolio and this opportunities come within a short period of time. Before they will transfer their coins from wallet to exchange the opportunity has gone, that is why people still keep their coins in exchange to enable them be dynamic and take risk

[Asiska02]

It's good to see recurring threads about this same mistake to maintain awareness. But, the more it appears on forums and medias people still keep blind ears to it. And such people pay the price when the exchange collapses or go bankrupt.

The right to one's own opinion is a universal one. No matter how a warning is spread, not everyone would heed it because nowadays people act very irrationally. Lack of understanding and occasionally placing too much trust in such exchanges, particularly those that have never experienced bankruptcy, are further factors contributing to people's strong attachment to retaining their money in an exchange. Before taking preventative measures, one does not wait to become ill with a certain condition.

[South Park]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

You are right but if you are a short term trader you do not really have too much of a choice, since it would not make a lot of sense for those people to withdraw their coins at the end of their session only to deposit them at the beginning of the session the very next day, so those people need to take the risk of storing their coins at an exchange, however those which are not really traders and are using the exchange as their personal wallet are without a doubt making a huge mistake, and they could end up paying a huge price just because they were too lazy to create their own wallet.

[stomachgrowls]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

Nothing new but there are still lots who had been mainly affected on the time comes where these platforms do really experience huge problems.
It had been suggested and been advised for how many times that its never been ideal on leaving your coins on an exchange, no matter how reputable and popular it would be
which there would be always the risks of this situation.
Its never been safe since on the first place thats why storing up huge amounts of money is never been recommendable.Its the basic but still people do really end up
on leaving their funds.Its never been safe but there are instances which we do really like on storing it there, even myself. 

[Stalker22]

In the end, the only way to be 100% sure that your crypto is safe is to remove it from an exchange and store it in a wallet where you control the private keys. One just needs to look at the exchange situation over the last few months to realize that this is nothing new or surprising. Businesses offering these services are simply not prepared for a rapidly fluctuating market. Nor are they prepared for the security risks of managing so much money. It is no wonder that they have failed in large numbers when dropping hundreds of millions in a week is a common occurrence in this market. That being said, you're still going to need to trust someone at some point; we haven't had a string of successful DEXs yet really get off the ground, so we'll see how those pan out in a year or two.

[Apocollapse]

I've created similar thread before Recent event: Stay away from centralized exchanges (FTX, Binance, etc), use DEX, this is why "not your keys, not your coins".

Never hold any coins inside the exchange since you don't have full control over your coins, just bought a hardware wallet e.g. Ledger or Trezor, better safe than sorry. Maybe this problem currently happen on FTX, but who knows in the future Binance will did same since they've a problem or get hacked. Centralized exchange is very vulnerable, it's just a fake statement if their exchange's security is very high.

[real_newguy05]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

It’s not so cut and dry. Keeping it at home or in some secret bank vault has its own risks, people can steal it(which they only need to copy the key you won’t even know until the coins are gone), it can burn down, your phone/private wallet can get hacked, cold storage access is severely limited which creates more risk if you need to keep getting the paper key every time etc… you can make backup and put it somewhere else, but that just opens up another point of exposure.

It all depends on your situation, if you live alone in a concrete house where no one has access, then yes keep it yourself, but most of us aren’t in this situation.  

Life is all about risk management, this is no different. Any exchanges outside of us regulation or foreign owned is a definite no, coinbase despite all the hate I think is pretty safe as they are us listed company and well regulated. Their risk management is also well defined. Can it still go down? Of course, is it likely to happen? Probably not.   Is it safer to keep your crypto there vs at your home safe? Only you can answer.

[rodskee]

Every day it seems a new story emerges about an exchange going bankrupt. Has been a recurring pattern since the Mt. Gox collapse. Why, with so many examples of failures, do people continue to keep their money on these? You don't own crypto if you have "coins" on an exchange, you have an IOU from a business that may or may not even be solvent.

actually it is not about Keeping money on exchange but how we need to use them , while there are some mixer to hide our identity yet exchange is important to all of us who trade and make this for a living.

I still use exchange but not as common as before .

Now if I only need to transact for certain coin that available in Binance directly to my local wallet, then yes binance is what i use.

[GreatArkansas]

Why, with so many examples of failures, do people continue to keep their money on these?
(....)

For sure, it's the most convenient way to access your funds, with easy access, you just need your email and password compared to using a personal wallet where you need to secure such things to make it secure but I don't agree with people that use their exchange account to store funds if they are not touching it at all, better to use personal wallet where you control it.
Crypto exchange must be only be use when trading so what's on your crypto account must be your funds that is for trading only not savings.

[Ayers]

the traders keep theirs on exchanges because they are on the lookout to make money on opportunities like the FTX bankruptcy. you wanna sell fast when the price plummets going to $16k, that's the advantage but they are also risking when the exchange pauses withdrawals.

if you don't care of prices going down and you want to be on the safer side, take your coins out the exchange.

Exactly, people who leave their money on the exchange they are not holding but because they are looking to profit through market volatility but unfortunately things have gone awry, which no one can predict before can. After Binance announced it would buy back FTX, the market reacted positively but then they changed their mind and the market started to fall, everything happened within 24 hours. Everything happened so fast that investors did not have time to react.

Once we have joined the market, the risk is always lurking for us, if we don't lose when investing, if we don't get hacked, our account will be locked by the exchange. Always invest with money you can lose.