Coins on an exchange, any exchange, are never safe

[gunhell16]

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.

In that matter we do not hold the decision of the investors here in cryptocurrency, it is their choice whatever they want to invest dude. Besides, cryptocurrency in the first place is full of risk and we knew that and maybe few don't know it.

Now if there are still people who are leaving assets in the exchanges here in the crypto space, maybe they are ready to face the risk they are taking, dude. I also have assets in other crypto exchanges but I'm not worried. After all, I know what I'm getting into even though, despite everything, it has risks because I'm a risk taker.

[nullama]

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 interesting to see https://rekt.news as they show almost daily hacks of different projects, platforms, exchanges, etc.



And meanwhile, bitcoin continues generating block after block...

Keeping your coins in an exchange defeats the purpose of using Bitcoin. You don't want to have intermediaries, that's the whole point.

[The Cryptovator]

Cex won't be safe ever and it seems to exchange native coins also wouldn't be safer even if you hold on to your hot wallet. How will you do with the token if it becomes zero? Tokens of native exchange would become zero anytime due to any reason that we have seen about FTX coin. We have to take a lesson from history and have to be very careful with our funds. It's crypto and anything could happen at any time whether something good or bad. So holding funds on exchange is never safe and holding native coins also never safe.

[michellee]

I think it's because people expect to be able to sell their coins in a short time at the highest price and then they will withdraw the profits all at once. But they don't understand that it won't always be the case and that's what makes them keep most of their coins in exchange for a long time. And when cases like Mt.Gox happen again and their accounts get impacted, they regret keeping their coins on the exchange. This shouldn't happen to us because we have to be responsible for our coins, so maybe sending them to another wallet would be better.

[yhiaali3]

Unfortunately this is true, the FTX exchange incident is not the first of its kind and it will definitely not be the last. There have been many similar incidents in the past and more will happen in the future, but on the other hand people need to deposit their money in the exchanges in order to be able to trade and get some profits, So what is the solution? The best solution in my opinion is to put a small portion of the capital into the exchanges to trade and keep the rest as a safe bitcoin wallet. In this way the loss can be reduced to a minimum.

[Vlad1977]

With danger comes opportunity, put it on the exchange to make a fortune at the right time. Most people choose to put it in the exchange, which is also a manifestation of their trust in the exchange, and no one thinks that a large exchange will fail. But each of us should think about the consequences. Every choice is made by oneself, so the consequences must be borne by oneself.

[Ucy]

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.

Or you are not in possession of real Bitcoin/Cryptocurrency if you do not possess the secret keys/phrases that can be used to access and use the cryptocurrency on wallet that allows you to control and use the keys safely on its platform

[mynonce]

... safely on its platform

"safely" & "on its platform" is against Bitcoin safety.

[glendall]

There are several possibilities why people are more comfortable to store funds on exchanges than in my personal wallet in my opinion, the main reason makes it easy to make transactions while experiencing an increase.
And I think wherever we save funds we will never safe , if we are not careful. Crimes will definitely exist and the partnership in us is also not avoided

[Cookdata]

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.

I think MT. Gox time didn't teach lots of people so much sense or perhaps they forgot so early that it happened 8 years ago but the situation is not different with SBF and FTX, Sam was an Id!ot for using customer's money for strategic partnerships but even at that, there were so many red flags that beg so many unanswered questions like where they were getting all those millions from, not that the fees are enough to generate such revenues for those purchases and partnerships but people were all quiet and didn't withdraw their assets.

Bitboy was ranting the other day shouting at SBF for lobbying the top US office but so many people were using that as common discussion and laughing instead of being concerned, now that the did have been done, they have to learn the hard ways not to leave their Bitcoins on exchanges, the movement has always been not your keys, not your coins. I hope this mistake is the last one we would have in the crypto industry because it's killing the hope of investors.

[Xxmodded]

I agree with  OP opinion about exchange market is not safety place for saving coins assets, however trusted with exchange market and have good reputation we can't expected about how long they can be trust when saving assets at some exchange market. Looking on cases happened with FTX exchange market after get problem with Binance exchange, have issues with withdrawing paused and not process yet.

I don't believe with exchange to hold coins for several years later, better save and hold coin in hot wallet like metamask, trustwallet or used hardware wallet if want secure hold coins.

[ilovealtcoins]

Unfortunately this is true, the FTX exchange incident is not the first of its kind and it will definitely not be the last. There have been many similar incidents in the past and more will happen in the future, but on the other hand people need to deposit their money in the exchanges in order to be able to trade and get some profits, So what is the solution? The best solution in my opinion is to put a small portion of the capital into the exchanges to trade and keep the rest as a safe bitcoin wallet. In this way the loss can be reduced to a minimum.

Or you can also at the end of the day after completing all the trades, you withdraw all to your non-custodial wallet. This will take time and a bit of fees but it is obviously safer to leave funds on centralized exchanges. We cannot stop using CEX, unless DEXs provide us with similar services.

[yhiaali3]

Or you can also at the end of the day after completing all the trades, you withdraw all to your non-custodial wallet. This will take time and a bit of fees but it is obviously safer to leave funds on centralized exchanges. We cannot stop using CEX, unless DEXs provide us with similar services.

Yes, this option can be good sometimes but not always, because in addition to the time and fees as you mentioned there is also another problem because sometimes you have an open deal and the price of the coin is down so you can't close the deal and lose your money so you have to wait a few days for it to go up The price of the coin and you can sell and close the deal, so I find it difficult to withdraw your money to a safe wallet on a daily basis at the end of every day.

[albon]

Previously, I was a fan of holding my coins on exchange platforms, but frankly, after I saw a lot of platforms that were hacked and declared bankruptcy, I decided to hold my coins in cold wallets like Ledger Nano X. I see that my coins will be much safer than holding them on exchange platforms because cold wallets are not connected to the Internet And no hacker can access them other than hot wallets and exchange wallets if you like to save your coins on an exchange, choose Binance, but you should not keep all your wealth on it.

[kryptqnick]

I haven't been following crypto exchange news lately, but I agree with the op that there's always a risk there. Less reputable exchanges can have bad security and get robbed or perform an exit scam. More reputable exchanges might still face issues due to mismanagement of funds or a security breach. On top of that, there are increasingly new and new KYC requirements for those who want to use crypto exchanges. Meanwhile, it's quite easy to just install Electrum wallet, generate a seed, create a password if a person wants an extra albeit probably unnecessary layer of protection and be the sole owner of one's coins, no KYC or anything else required.

[philipma1957]

Well you need a few coins on exchanges if you do business with quite a few companies that only take coins for payments.

If you DCA long term you need an exchange to buy the coin.

say you have 5000 usd on coinbase and it is for doing a 200 a  week dca buy of bitcoin.

you can pull the btc off every 5 buys and self custardy it.

So your risk of losing funds is greatly reduced.

Plus the usd cash on coinbase is insured by the fed government if you are USA based.

[DooMAD]

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

Human nature.  It's often either greed or laziness. 

Lazy people think it's too much effort to manage their own keys and keep secure backups, so they place trust in total strangers on the internet to do it instead.  It strikes me as madness, but people like that definitely exist.  As a very rough generalisation (I know it doesn't apply to everyone), people seem to prefer convenience over security.

And greed causes people to come to terms with the realisation that, while you're holding your own keys, it's more difficult to gamble by day-trading altcoins and other tokens.  It's easier to again trust total strangers on the internet.  Supposedly a risk worth taking because the potential for profit is too tempting to resist. 

I used to do it with small amounts, but I don't anymore.  I never had coins on Gox, but I was right here when it collapsed and witnessed the fallout first hand.  That event definitely instilled some caution into my mind.  Not sure why it didn't have the same effect on others.

[serjent05]

Crypto exchanges are created to exchange and trade our coins from one coin to another.  It is not meant to be our personal wallet.  So anyone using it as a personal wallet is in for a possible rekt when the cryptocurrency exchange is hacked, turned scam, or got bankrupt.  So let us remind ourselves and the people around us to no treat exchanges as personal cryptocurrency keepers.  Send only coins that are meant to be traded and leave only coins that are on order and make sure to turn on notification so that once the order is fulfilled, we can immediately withdraw the cryptocurrency to our own wallets.

[Ultegra134]

Well, we tend to believe or hope that it won't happen to us. In my opinion, we use exchanges out of comfort. They are relatively simple to set up and provide you with a wide range of capabilities.Exchanges such as Binance or CEX.io go as far as having investment plans, staking functions, and saving functions. On the one hand, I feel relatively safe on Binance; however, everyone is guilty until proven innocent. You never know what might happen to the exchange, but even if Binance went bankrupt, which is unlikely, it would have a huge impact on cryptocurrencies.

From what I've understood, can someone be absolutely safe? I'm storing bitcoin on my computer through Electrum; how safe am I? How can you store cryptocurrencies when using DeFi projects and being involved in staking? Metamask doesn't look too safe to me.

[BitDane]

I believe it isn't bad to use crypto exchanges if we are to trade, or even leave coins that are intended for trading. Leaving coin in an exchange will be an issue if we use it to keep our cryptocurrency because we never know what will happen in that exchange in the future.  I had a bad experienced regarding leaving coins in an exchange for a long time.  Since I trusted the exchange, it never occurs in my mind that the exchange would declare bankruptcy, they send notice to users but I failed to read it on time.  The time I read it, the allotted time for withdrawal request of funds I already expires.  My fault on not getting my self updated and my fault of keeping my crypto in exchanges, if only I kept it on my wallet, no matter how long that crypto is untouched, I will always have access to it.