Not your key not your coins is real, not just quoted. (FTX Issue)

[swogerino]

Based on what I understand on FTX current situation. User can still get there funds once the FTX manage to file for bankruptcy to liquidate there assets for paying back customer money. Even Mt Gox is now paying back there customers after a long year while FTX is a regulated exchange on US which means users is protected by the law and has a chance to claim back there funds.

But the inconvenience of can’t use your money out of exchange is frustrating and the chance to wait for a long time just to claim it like Mt Gox all over again.

I hope everyone gets back their coins but isn't this a story we have already heard here in the forum several times?I think that the title of this thread is great and extremely important to emphasize that every fund that we hold through some third party no matter how trustworthy they may be,they still remain a third party at which we have not the slightest control whatsoever.

I was personally a victim of Cex.io where they refused to continue give me service after I declared them that the funds that I exchanged there were from mining activities,even send them pictures and videos yet their customer service was so incompetent and not at all tech savvy that they still asked me for an email for my wallet password  not knowing what Electrum was at all,they stopped my account but they were kind enough to let me withdraw anything I had there.Based on my personal story I have said several times in other parts of the forum here especially in the Exchanges part that everyone should get their funds out of them and if they want to trade to keep only the amount they intend to do trading with.

[1714617397]

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[Odusko]

The possibility of the exchange getting back their money is very limited, and since FTX is not like Binance that have a large reserve to take care of hack issues to repay customers, I don't know if FTX have Safe funds to cater to situations like this but. we can't tell if all clients will sincerely get the money back after the investigation.

[tabas]

We are seeing real world situations from these things. Exchanges that are in hot seats are having hard time to allow their users to withdraw money.
Banks that don't have that much money left or is controlled by the government ordering to delay withdrawals of their customers money. So, there's really nowhere to go if you're trusting your money to them.
They'll give you a very hard time to even get your money from them. That's why the meaning of the known reminder is really applicable, if we don't the keys, we don't own our coins.

[Ultegra134]

The reason people use a centralized exchange is that if there is a dollar there, it's easy to buy and sell any coin from there at any time with no extra fees, but if you keep your funds in a personal wallet and you exchange it from the DEX.  If you want then your fee will be cut more and to avoid this extra fee most people use centralized exchange but it is a risky thing many will never think but after the incident of FTX crash everyone will be careful to keep their dollars in CEX and  Think twice . so if someone want to hold there coins then they should use hardware wallet which will safe there fund as well

This all means there is no trusted centralized exchange. The only problem is, converting bitcoins to fiat or trading bitcoin is very important to many people (that's a fact). Unfortunately, we have to be connected to one of the CEXs to do it, while the DEX can't help us with that thing. Any solution for that?

There is no alternative solution.  We must use a CEX to convert our bitcoins and other cryptocurrencies to fiat in which case DEX cannot help us. But in this case we need to use a proper and trusted centralized exchange.  However, no CEX can be fully trusted in the current situation.  Because when something like this can happen with a big and popular exchange like FTX how can we trust a cex completely now.

Exchanges are a necessary evil, especially if you're trading on a daily basis, even though there are a few decentralized alternatives. The main point is to avoid storing coins somewhere you practically have no access to. Would you trust a stranger with your money? Nope. Well, exchanges are something similar. While I don't believe that Binance would suffer something similar to FTX, it's best to be on the safe side, which is also the main reason I keep my Bitcoin out of reach.

Not only do you pose a risk from exchanges themselves, but also from malware or phishing attempts. Not long ago, I was scammed through a Chrome extension.

[serjent05]

The possibility of the exchange getting back their money is very limited, and since FTX is not like Binance that have a large reserve to take care of hack issues to repay customers, I don't know if FTX have Safe funds to cater to situations like this but. we can't tell if all clients will sincerely get the money back after the investigation.

Actually, it is nearly impossible.  They declared bankruptcy meaning the exchange hasn't had enough funds already.  Then they announced a hacking incident that stole a huge amount of money.   So from the situation, I do not think that FTX has enough funds to reimburse their clients.  Let alone the exchange is already suspected of misappropriation of funds.

[OcTradism]

Actually, it is nearly impossible.  They declared bankruptcy meaning the exchange hasn't had enough funds already.  Then they announced a hacking incident that stole a huge amount of money.   So from the situation, I do not think that FTX has enough funds to reimburse their clients.

If they have had enough funds to reimburse their clients, they would have not submitted for bankruptcy Chapter 11.

Sam Bankman-Fried did not see a light at ending of tunnel. He got no help from either Changpeng Zao and Justin Sun or other cryptocurrency billionaires. He had to exit and filing for bankruptcy is his last choice.

Let alone the exchange is already suspected of misappropriation of funds.

I believe FTX exchange is not an only exchange which handles customer capital inappropriately and unsafely. In the past two years, we have been witnessing many attractive programs from exchanges: staking with high Annual Percent Yields, staking with stable coins. Moreover, abundant stable coins were created in the last bull run.

In previous years, there were very limited stable coins but in 2020 bull run, I even can not remember how many stable coins were launched and even did not know all of new stable coins.

[Don Pedro Dinero]

The possibility of the exchange getting back their money is very limited, and since FTX is not like Binance that have a large reserve to take care of hack issues to repay customers, I don't know if FTX have Safe funds to cater to situations like this but. we can't tell if all clients will sincerely get the money back after the investigation.

Actually, it is nearly impossible.  They declared bankruptcy meaning the exchange hasn't had enough funds already.  Then they announced a hacking incident that stole a huge amount of money.   So from the situation, I do not think that FTX has enough funds to reimburse their clients.  Let alone the exchange is already suspected of misappropriation of funds.

The downside of this is to see how the crypto space, which grew out of the idea of P2P, in many cases like this one has ended up acting like the institutions the White Paper sought to flee from. They have taken the deposited bitcoins and gambled with them as if they were in a casino.

When FTW declared bankruptcy, other exchanges have had to come out to prove their liquidity, which is also questionable, as there have been some strange transactions in between.

[Ahli38]

Storing large amounts of assets in the stock exchange is indeed a reckless act. However, I still keep some of my assets on exchanges like Binance because I still carry out my daily trading activities. but for long-term investment assets then of course I never keep it on exchange. because I knew that it was a reckless act.
but it seems that today after what happened to FTX, people have come to their senses. and start moving their assets to personal wallets.
even according to the news I read that Bitcoin outflow from Cex in recent days has reached a record high in history. Sourch : Exchange outflows hit historic highs as Bitcoin investors self-custody

[Kakmakr]

People are used to custodial wallets where a centralized authority guard and manage their money for them, so they should also accept the risk that come with that. We live in a world where lazy people want convenience and these central authorities offer that for them on a plate. (at a cost)

The people who use methods to store their coins, where they have full control over their Private keys... are the people who understand the risks associated with the use of custodial wallets. (They saw what happened in Cyprus, where the Banks took people's deposits and they also saw what happened with Mt Gox and all the other Exchanges that got hacked) 

[dezoel]

People are used to custodial wallets where a centralized authority guard and manage their money for them, so they should also accept the risk that come with that. We live in a world where lazy people want convenience and these central authorities offer that for them on a plate. (at a cost)

The people who use methods to store their coins, where they have full control over their Private keys... are the people who understand the risks associated with the use of custodial wallets. (They saw what happened in Cyprus, where the Banks took people's deposits and they also saw what happened with Mt Gox and all the other Exchanges that got hacked) 

I think those people who are like that are a newbie in crypto and are used to centralization services but once they hang out more here and increase their crypto knowledge, that's the time they realize the importance of decentralization. They will realize that non-custodial wallets are the best wallet to use, not custodial and centralized exchanges.

If it's about convenience then I think decentralized platforms are a way to go because they don't require sign ups, they don't require KYC bull shits. They are just plug and play kind of a thing but if we are not organized then it will be a big problem because we can miss place our private keys.

[slaym]

I read an article today that said, '15M/19M BTC are held in self custodial wallets'.  https://cryptoslate.com/ftx-crash-pushes-bitcoin-to-self-custody-ethereum-switched-for-stablecoins/ .  I wonder if there's a way to fact check that?

[S A KHAIR]

The possibility of the exchange getting back their money is very limited, and since FTX is not like Binance that have a large reserve to take care of hack issues to repay customers, I don't know if FTX have Safe funds to cater to situations like this but. we can't tell if all clients will sincerely get the money back after the investigation.

They have declared bankruptcy, which means there is no more reserve capital to pay investors, so it is hopeless to expect FTX to pay back. Only investors in the US and Bahamas can get a refund under the law as FTX is registered to do business in these two countries so they have to follow the laws of those two countries or SBF will face the law. Other markets have no opportunity because they are not protected by law.

[BTCGalaxyA12]

I am very grateful to save my small money to wallet where I have the key. I don't worry, I sleep well and have sweet dreams.

There are already wallets where you can keep the private key with free and open source, I don't know why they don't think that. I don't know why they believe the exchange than himself?

From now onwards the useful thing we can do is tell our friends, relatives, family and those we know to immediately withdraw the money deposited in the exchange.

Bitcoin makes it easy not to complicate.
Don't be surprised when you wake up, you're already in the galaxy.

[abel1337]

People are used to custodial wallets where a centralized authority guard and manage their money for them, so they should also accept the risk that come with that. We live in a world where lazy people want convenience and these central authorities offer that for them on a plate. (at a cost)

The people who use methods to store their coins, where they have full control over their Private keys... are the people who understand the risks associated with the use of custodial wallets. (They saw what happened in Cyprus, where the Banks took people's deposits and they also saw what happened with Mt Gox and all the other Exchanges that got hacked) 

I think those people who are like that are a newbie in crypto and are used to centralization services but once they hang out more here and increase their crypto knowledge, that's the time they realize the importance of decentralization. They will realize that non-custodial wallets are the best wallet to use, not custodial and centralized exchanges.

If it's about convenience then I think decentralized platforms are a way to go because they don't require sign ups, they don't require KYC bull shits. They are just plug and play kind of a thing but if we are not organized then it will be a big problem because we can miss place our private keys.

This will be the time that they will realize that non-custodial wallet is important and the reason why many people are using it. It is expected that most newbies are using centralized wallet given the fact that centralized wallets are very easy to use and there's no hassle in buying and selling especially that there are so many features in it including those trading features. Though this incident should make them realize how prone it is for such hacks, funds locked and other common centralized problems. Actually I have friends who are only using custodial wallets and some of them are using exchange as their wallets, I just know this until they messaged me and I opened a topic about it when we are conversing. Of course my advise is given to them and I'm pretty sure they have their own non-custodial wallets now.

[serjent05]

The possibility of the exchange getting back their money is very limited, and since FTX is not like Binance that have a large reserve to take care of hack issues to repay customers, I don't know if FTX have Safe funds to cater to situations like this but. we can't tell if all clients will sincerely get the money back after the investigation.

Lol, the exchange had already filed bankruptcy, and I think that hack is an inside job.  One way of the management to lessen the financial burden of the exchange since they can just blame hackers for the lack of funds  to reimburse their clients.  If ever the clients failed to get their money, the only course of action is to file a lawsuit against the exchange management.

[Smartvirus]

That quote "Not your key not your coins" I just know work from today when looking how difficult to withdraw our money if we don't have the private key and seed.

As I know, this is not the first time the exchange or other platform hold customer money in their pocket. it's obvious de facto, it's our money but they can't give to us.

It's as real as that.
You know, exchanges are just like banks, most of them are centralised and so they call the shorts, just like banks. You might have an account number which is synonymous to an account number and a password just like you've got on exchanges too.
They are at right to limit your withdrawals, access to your accounts, demand compliances, froze your account, keep records on you with the the authorities if necessary and more.
It's truly centralized and you don't have access so, you've got to tread carefully. Try not to leave large amounts on an exchange. You identify the advantage you wish to benefit from, make use of it and your out.

[BitDane]

That quote "Not your key not your coins" I just know work from today when looking how difficult to withdraw our money if we don't have the private key and seed.

As I know, this is not the first time the exchange or other platform hold customer money in their pocket. it's obvious de facto, it's our money but they can't give to us.

It's as real as that.

You know, exchanges are just like banks, most of them are centralised and so they call the shorts, just like banks. You might have an account number which is synonymous to an account number and a password just like you've got on exchanges too.

True, but the exchanges are not made to bank our funds.  They are made to exchange cryptocurrencies and we must use it according to its function .. to trade and not to bank our fund and keep it on the exchange.  We will see how devastating it is if we keep on using exchanges as bank when the exchange got bankrupt or hacked (FTX the recent example).

They are at right to limit your withdrawals, access to your accounts, demand compliances, froze your account, keep records on you with the the authorities if necessary and more.
It's truly centralized and you don't have access so, you've got to tread carefully. Try not to leave large amounts on an exchange. You identify the advantage you wish to benefit from, make use of it and your out.

Yeah, since they(exchange) own the key where we keep our funds(if we keep our funds on exchanges), they have all the power and authority to use our funds and we can't do anything about that.

[Fatunad]

That quote "Not your key not your coins" I just know work from today when looking how difficult to withdraw our money if we don't have the private key and seed.

As I know, this is not the first time the exchange or other platform hold customer money in their pocket. it's obvious de facto, it's our money but they can't give to us.

It's as real as that.
You know, exchanges are just like banks, most of them are centralised and so they call the shorts, just like banks. You might have an account number which is synonymous to an account number and a password just like you've got on exchanges too.
They are at right to limit your withdrawals, access to your accounts, demand compliances, froze your account, keep records on you with the the authorities if necessary and more.
It's truly centralized and you don't have access so, you've got to tread carefully. Try not to leave large amounts on an exchange. You identify the advantage you wish to benefit from, make use of it and your out.

Government could only touch up crypto transactions and making out some surveillance via these exchange platforms which we do know that they are regulated or centralized then expected that every
transaction on which an account make would really be not anonymous and this is the thing you should accept and be wary on the time that you had deposit into an exchange.
This is part of the risk and you should really be that prepared for whatever things that could happen on an exchange since we know that we dont possess it wallet keys then
everything that might happen will really be that in resulting for possible lost of funds forever which its not really that surprising imho.

[Sarah Azhari]

However, I still keep some of my assets on exchanges like Binance because I still carry out my daily trading activities. but for long-term investment assets then of course I never keep it on exchange. because I knew that it was a reckless act.

I think it's ok if only for a moment such as swapping then immediately withdraw it, And, what the problem now is when you keep it for a long time in exchange like in some cases in several exchange.

I read an article today that said, '15M/19M BTC are held in self custodial wallets'.  https://cryptoslate.com/ftx-crash-pushes-bitcoin-to-self-custody-ethereum-switched-for-stablecoins/ .  I wonder if there's a way to fact check that?

It's difficult when they don't prove the address. Just try to ask directly to the official, I am really sure they don't want to share it.

[Ahli38]

However, I still keep some of my assets on exchanges like Binance because I still carry out my daily trading activities. but for long-term investment assets then of course I never keep it on exchange. because I knew that it was a reckless act.

I think it's ok if only for a moment such as swapping then immediately withdraw it, And, what the problem now is when you keep it for a long time in exchange like in some cases in several exchange.

exactly what I thought. But the fall of FTX seems to have brought many lessons and raised awareness among many people who previously had too much faith in an exchange. In fact, many people don't hesitate to store their bitcoin assets in large quantities on an Exchange. But now it seems that people have learned lessons and awareness. and now they began to do what they should have done long ago. i.e. keeping their assets in private wallets. and now the withdrawal of the number of bitcoins from the exchange to a personal wallet has increased rapidly even according to the sources I have read in the last 7 days the number of bitcoins that have been transferred from the exchange has reached 192,340BTC. The main outflows have been from exchange giants such as Coinbase pro (70,101 BTC), binance (58,689.42 BTC) and Gemini (13.270,80 BTC).
For more details, we can read it in many sources, but the source I read is this Watcher.guru & Coinglass.