Why I will never trust top exchanges

[Botnake]

Weeks ago Binance admits to the mistake of storing users funds in a collateral wallet, is this not why they passed the Reserve Audit?🤦 All they have to do is just move crypto assets that belongs to exchange users into their collateral wallet and pass the audit and avoid getting caught. Then they go on Twitter and make a tweet that "Funds are Safu".


https://dailyhodl.com/2023/01/24/binance-admits-to-mistake-of-storing-its-users-crypto-assets-inside-collateral-wallet-report/

I believe the came out in the open before someone else does, to keep their reputation in checked.

As for the auditors, they don't even know how to audit in the first place, or is it right to say that exchanges just know how to get smarter than auditors?

Anyway, it's easier for them to meddle with users funds and do what they feel like, FTX Sam was caught doesn't mean he is the only bad actor, others aren't pure as well.

No matter what you plan to do on centralised exchanges, do not trust them.

It’s really a big mistake to trust exchanges because they are not there to secure your funds and keep them safe forever, but to make use of it and to make advantage of your own funds so they can grow and expand their business using your deposits. This is really in general because it’s certainly a fact that no single exchange can guarantee the security of our coins, not today and not tomorrow. If you aim to make your coins safe, then prefer to have your own wallet, that way you have all the means to make it fully secured.

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[virasisog]

Weeks ago Binance admits to the mistake of storing users funds in a collateral wallet, is this not why they passed the Reserve Audit?🤦 All they have to do is just move crypto assets that belongs to exchange users into their collateral wallet and pass the audit and avoid getting caught. Then they go on Twitter and make a tweet that "Funds are Safu".


https://dailyhodl.com/2023/01/24/binance-admits-to-mistake-of-storing-its-users-crypto-assets-inside-collateral-wallet-report/

I believe the came out in the open before someone else does, to keep their reputation in checked.

As for the auditors, they don't even know how to audit in the first place, or is it right to say that exchanges just know how to get smarter than auditors?

Anyway, it's easier for them to meddle with users funds and do what they feel like, FTX Sam was caught doesn't mean he is the only bad actor, others aren't pure as well.

No matter what you plan to do on centralised exchanges, do not trust them.

It’s really a big mistake to trust exchanges because they are not there to secure your funds and keep them safe forever, but to make use of it and to make advantage of your own funds so they can grow and expand their business using your deposits. This is really in general because it’s certainly a fact that no single exchange can guarantee the security of our coins, not today and not tomorrow. If you aim to make your coins safe, then prefer to have your own wallet, that way you have all the means to make it fully secured.

Every exchange has their own issues but if you wouldn't trust too exchanges, are you going to risk your funds in unknown exchanges with worse issues? I believe that if an exchange is providing good services and have a good trading volume, they still worth our trust. There's just no guarantee that they can secure our funds all the time so we must take charge of handling it responsibly. Placing and storing our personal funds in our personal wallets will be the safest thing to do.

[MiF]

Well i guess many people still choose top exchange than any other, it is because they are most trusted than other exchange they ranked as top exchange for nothing, maybe expert saw that they are more secure than to those who are not rank as top. So for me even if some big exchange has also an issue i will choose to use them because i feel more secure and safe.

[sulendra12]

No matter what you plan to do on centralised exchanges, do not trust them.

I would trust them if they are top exchanges but to the point so they can work on it, even though in the background their words don't necessary true and could be worse in the background. I've seen something like if they get hacked and they said "your funds are safe" but in the background it's worse than that so they told us "safe" to keep the users on their platform. You can store small money on there but whatever you do, there are always risks that exchange could have problem later, that risks your money as well.

[Silberman]

Well i guess many people still choose top exchange than any other, it is because they are most trusted than other exchange they ranked as top exchange for nothing, maybe expert saw that they are more secure than to those who are not rank as top. So for me even if some big exchange has also an issue i will choose to use them because i feel more secure and safe.

You can use a centralized exchange but avoid making the mistake of trusting them completely, but what does this exactly means? Avoid leaving your coins there for long periods of time, using exchanges for the reason they were created, exchanging your coins for fiat, stable coins, altcoins or bitcoin is an acceptable use of their services, but leaving your coins there and using them as your main wallet is a mistake, as you are giving them complete control over your coins and finances, and we know that all centralized institutions which have been given this power have taken advantage of it.

[LogitechMouse]

You never trust these top exchanges is your opinion and there's nothing wrong against it. After all, it's your experience.

On the other hand, if I will pick the most trusted centralized exchange so far, there's nothing come close to Binance. FTX tried to be as close as Binance to the point that many see FTX as Binance's rival, but what happened? For sure, you know what happened right?

As for me, I don't "fully" trust these top exchanges even Binance, but I will still use it because I'm trading, and it's the place where I'm buying coins that I need to hold. Even so, there are still many users of Binance who chooses to store their coins into the exchange giving the full trust to them. Maybe because they can earn extra money on their exchange thru that "earn" feature, or maybe if they need to sell or buy coins for whatever reason/s it is, they don't need to wait a little longer because they can just trade it immediately.

[bettercrypto]

You probably say that because of your bad experience with the top exchanges in the crypto industry. If in the top exchanges the risk still does not disappear here, what about the exchanges that are not included in the top ranking here in the crypto space, the level of risk is higher.

    Also, I think that even if that happens, an exchange will remain at the top as long as they know how to immediately resolve the issue that is happening on their platform for sure.

[Inwestour]

You can use a centralized exchange but avoid making the mistake of trusting them completely, but what does this exactly means? Avoid leaving your coins there for long periods of time, using exchanges for the reason they were created, exchanging your coins for fiat, stable coins, altcoins or bitcoin is an acceptable use of their services, but leaving your coins there and using them as your main wallet is a mistake, as you are giving them complete control over your coins and finances, and we know that all centralized institutions which have been given this power have taken advantage of it.

In addition to the fact that it is not worth keeping coins on the exchange for a long time, it would also be good to send small amounts of coins to the exchange for trade, or purchase.

Let it not be so profitable, let it be spent a little more on commissions, but the risks will be less than if you sent a large amount to the exchange and the exchange blocked it for some reason.

Perhaps this is a rarity, but still I would be calmer if I knew that the blocked amount would not be critical for me. In addition, there are platforms and services that allow us to do without exchanges, but it is possible that there are certain risks in their use.

[Fatunad]

You can use a centralized exchange but avoid making the mistake of trusting them completely, but what does this exactly means? Avoid leaving your coins there for long periods of time, using exchanges for the reason they were created, exchanging your coins for fiat, stable coins, altcoins or bitcoin is an acceptable use of their services, but leaving your coins there and using them as your main wallet is a mistake, as you are giving them complete control over your coins and finances, and we know that all centralized institutions which have been given this power have taken advantage of it.

In addition to the fact that it is not worth keeping coins on the exchange for a long time, it would also be good to send small amounts of coins to the exchange for trade, or purchase.

Let it not be so profitable, let it be spent a little more on commissions, but the risks will be less than if you sent a large amount to the exchange and the exchange blocked it for some reason.

Perhaps this is a rarity, but still I would be calmer if I knew that the blocked amount would not be critical for me. In addition, there are platforms and services that allow us to do without exchanges, but it is possible that there are certain risks in their use.

Whenever i do sent out some coins/tokens in an exchange then those amounts would really be just good for the sake of trading and make out some short term approach and the rest of them would be hold up on a cold wallet on which im not really that confident even if they had been trusted by the community considering that we've seen huge exchange hacks and other problems in the past which we cant really make ourselves that
too trusting these platforms.This is why its never been recommendable on storing up huge amounts on an exchange wallet.Nothing beats out if you do store up your assets on non-custodial than with those centralized
on which we dont possess its keys.Its just common sense on where you would be preferring into and how to avoid such risks.

[Crypto Library]

So for me even if some big exchange has also an issue i will choose to use them because i feel more secure and safe.

It's true that most of us crypto users have to engage with centralized exchanges even if we don't want to. But you should not hold your funds there even if you feel secure and safe in your preferred exchangers.  If you want, you can do short-term trading because there is no other way than using centralized exchangers for because of easy handling and low trading fees.
However, centralized exchangers are never the perfect choice for securing your funds. Because here you already gave the control of your fund to them.
I agree with the OP that never looking at centralize that should not be trusted, and now after seeing the ftx exchanger incident I think  the fast I can withdraw my funds from cexs , the fast I can breath

[TimeTeller]

So for me even if some big exchange has also an issue i will choose to use them because i feel more secure and safe.

It's true that most of us crypto users have to engage with centralized exchanges even if we don't want to. But you should not hold your funds there even if you feel secure and safe in your preferred exchangers.  If you want, you can do short-term trading because there is no other way than using centralized exchangers for because of easy handling and low trading fees.
However, centralized exchangers are never the perfect choice for securing your funds. Because here you already gave the control of your fund to them.
I agree with the OP that never looking at centralize that should not be trusted, and now after seeing the ftx exchanger incident I think  the fast I can withdraw my funds from cexs , the fast I can breath

The fact that we still need a lot of financial services from these exchanges, means, we need to use them at one point no matter what.
As you said, just use them for like trading purposes and get out your funds as soon as you finished.
However, if you will use their savings or staking services, you are letting them to have control of your funds and you are ready to risk your funds.
But as much as possible, use the services of top trading platforms with insurance like with binance.
Otherwise, send your funds to your own wallet, for your own peace of mind. We can't be very sure of what will happen next in this market.

[Smartvirus]

The fact that we still need a lot of financial services from these exchanges, means, we need to use them at one point no matter what.
As you said, just use them for like trading purposes and get out your funds as soon as you finished.
However, if you will use their savings or staking services, you are letting them to have control of your funds and you are ready to risk your funds.

Some time ago following the FTX scam, the CEO of Paxful also sent a resounding warning as an alarm call on how to use an exchange. Stressing that  it wasn't safe to leave a lot of funds on an exchange, you only get to leave what you need and when your done, you tale it out. This could be another business strategy in a bid to buy trust but, it is the truth non the less. Exchanges arr subject to scams  hacks and fraud that might either arise from within or out.
It's not same when you have your coins saved on a wallet. You are at a better chnace of securing your funds on a wallet. You just need to be more privacy and security concerned.

[carlfebz2]

The fact that we still need a lot of financial services from these exchanges, means, we need to use them at one point no matter what.
As you said, just use them for like trading purposes and get out your funds as soon as you finished.
However, if you will use their savings or staking services, you are letting them to have control of your funds and you are ready to risk your funds.

Some time ago following the FTX scam, the CEO of Paxful also sent a resounding warning as an alarm call on how to use an exchange. Stressing that  it wasn't safe to leave a lot of funds on an exchange, you only get to leave what you need and when your done, you tale it out. This could be another business strategy in a bid to buy trust but, it is the truth non the less. Exchanges arr subject to scams  hacks and fraud that might either arise from within or out.
It's not same when you have your coins saved on a wallet. You are at a better chnace of securing your funds on a wallet. You just need to be more privacy and security concerned.

Exchange owners or to those who are part of it, telling that never trust exchangers is really just showing off some fake symphathy or just to make them look as a good guy but the community arent that dumb on not

to see that behind.It is really just that we cant really just avoid not to make use of their service or platform considering that conveniences that they could give then it is really that hard for us to stop.

Its true that it would be ideal if you are really just pulling your funds when you are done on trading, never ever leave those funds on exchangers but most of the time we are really that
too mindful about fees and the hassle and this is why we do decide to make it stay.

[shinratensei_]

of course everyone wants to keep their investments safe from any possibility of an exchanges crashing but the thing is, the liquidity is in these exchanges, when you are investing you want as much liquidity there is to avoid slippage, but you couldn't do that using uniswap, etc, therefore you are left without choice and that is using these exchanges, we all know that the recent incident involving the famous exchanges are quite devastating, but there's just no helping it that majority of people out there would still prefers using conventional exchange because they are more convenient and because the liquidity could hardly get out of the platform.

[Hamza2424]

Always you need to be very careful while using centralized exchanges and never hold long-run funds on these exchange wallets. Centralized exchanges always try to manipulate somehow the market sentiments to wash out Future trading accounts in a panic situation. The reserves in the centralized wallets are shady so keep a close eye on the News and updates.
As the currency BUSD reports the BUSD-minted tokens on the other chains are shady from the reserves point of view. BUSD on the BSC is transparent but the BUSD on other chains seems over-printed as compared to the total reserves this is the reason SEC imposed a grip on the BUSD minting.
Long story short be careful with the centralized exchanges.

[armanda90]

Can't guarantee about how safety our assets in decentralize exchange market and latest have bad news with BUSD as Binance stable coins, we can't predicting what happen later with Binance and how long this exchange keep in the trust line. Cold wallet or hardware wallet is the most safety place for long term holding your cryptocurrency assets than priority for saving fund in exchange market although have good trust right now.

FTX exchange collapse have enough lesson why can't fully trust with top exchange market with holding huge fund for longer time, but if try with scalping looking on exchange have good reputation but don't hold assets for longer time in exchange market.

[Silberman]

You can use a centralized exchange but avoid making the mistake of trusting them completely, but what does this exactly means? Avoid leaving your coins there for long periods of time, using exchanges for the reason they were created, exchanging your coins for fiat, stable coins, altcoins or bitcoin is an acceptable use of their services, but leaving your coins there and using them as your main wallet is a mistake, as you are giving them complete control over your coins and finances, and we know that all centralized institutions which have been given this power have taken advantage of it.

In addition to the fact that it is not worth keeping coins on the exchange for a long time, it would also be good to send small amounts of coins to the exchange for trade, or purchase.

Let it not be so profitable, let it be spent a little more on commissions, but the risks will be less than if you sent a large amount to the exchange and the exchange blocked it for some reason.

Perhaps this is a rarity, but still I would be calmer if I knew that the blocked amount would not be critical for me. In addition, there are platforms and services that allow us to do without exchanges, but it is possible that there are certain risks in their use.

This is a nice idea but I doubt many traders will be interested in something like that, especially since this is something that will bring to them additional costs and will consume more time than just sending the coins they wanted to convert in a single transaction, still it is important to bring those ideas forward from time to time so newbies traders realize this is an option and they decide to implement it in the case they lose part of the trust they have on centralized exchanges.

[Strongkored]

As for the auditors, they don't even know how to audit in the first place, or is it right to say that exchanges just know how to get smarter than auditors?

Top exchanges will definitely have issues in whatever form they are and because they are well-known they will definitely get more attention from regulators than small exchanges, with all the issues they have they are still more worthy of trust than small exchanges, if big exchanges cannot be trusted then small exchanges more untrested.

[Sayeds56]

As the currency BUSD reports the BUSD-minted tokens on the other chains are shady from the reserves point of view. BUSD on the BSC is transparent but the BUSD on other chains seems over-printed as compared to the total reserves this is the reason SEC imposed a grip on the BUSD minting.
Long story short be careful with the centralized exchanges.

It is correct that using centralized exchanges comes with certain risks, such as manipulation of price and uncertain reserves in the exchange wallets.It is important for individuals to exercise caution and thoroughly research any exchange before using it. In my opinion the best practice is to hold digital assets in personnel wallet and only use reputable exchange when you need to buy/sell any assets.

Regarding BUSD, the collapse of UST (a stable coin that was pegged with US Dollar) serves us a reminder that no stable coin is completely  secure. However, in case of BUSD which is backed by financial stability of Binance and regularly audited, but still it is important for us to exercise caution when using stable coins & stay informed  about any news related to their stability and security.

[Flexystar]

Binance might be drunk like hell that day. Lolz.

Why would they go and announce it publicly? It could have caused big chaos amongst the users and thus a dump could have initiated due to their deed. Seriously what sort of or unskilled people might be hired in the management team that led to such breakdown.

Isn’t this should be untouchable fund that they were fishing on and could be sued for that?

I think this problem persist for the hardcore traders only since they need to keep the trading fund available on an exchanger all the time. For example, I almost keep zero funds on an exchanger. If I ever see an opportunity of selling my portfolio then only I would go and sell it. May be that’s the best way to stay in the crypto world now. Keep it in your custody.