With these acts, do we still believe in Centralized Exchanges?

[Abu-Naim]

Recently, Binance has changed some deposit addresses for its users, which they said is due to security, and some of the forum users here were on the support list as it is good for such acts for security reasons.

Hotbit Exchange has now announced that all CEX operations will cease as of May 22, 2023, though users will still be able to withdraw all of their funds prior to June 21. They believe the former management employee, who quit working there in April, was involved in a project that violated Hotbit rules.

My questions here are:
1. Can centralized exchanges be fully relied on again?
2. Can we trust them with our money even as all those recent ones are given room for the users to withdraw their funds?
3. And can we depend on this opportunity to allow users to withdraw their funds and keep trusting them?

I feel that if the CEX management does not trust themselves, then why are we trusting them and giving them our coins to keep for us?

Hotbit has given three reasons for this action, which are as follows:

1. deterioration of the operating conditions.
2. change in the crypto industry trend.
3. Hotbit has also suffered numerous problems, such as repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses.

Source: https://hotbit.zendesk.com/hc/en-us/articles/14750194236823-It-s-time-to-take-a-bow

[1714516383]

1714516383

[1714516383]

1714516383

[1714516383]

1714516383

[1714516383]

1714516383

[1714516383]

1714516383

[Charles-Tim]

My questions here are:
1. Can centralized exchanges be fully relied on again?
2. Can we trust them with our money even as all those recent ones are given room for the users to withdraw their funds?
3. And can we depend on this opportunity to allow users to withdraw their funds and keep trusting them?

1. No experienced person will rely on exchanges. It is not your keys and it is not your coins on blockchain. Which means you have no full control over your own coins.

2. With noncustodial wallet, you will have no one to trust. Leave only the money you are using to trade on exchanges and have the remaining on noncustodial wallet. Some people will trade and still always transfer all their trading money to a noncustodial wallet. Offline wallets which are safer.

3. Do not trust. Trust only yourself.

[Coyster]

I feel that if the CEX management does not trust themselves, then why are we trusting them and giving them our coins to keep for us?

'We' do not trust centralized exchanges to keep our coins, at least coming from the perspective of people who know the right way to keep their coins. Being your own bank means you keep your coins yourself, thus if you have been trusting third party entities to keep your coins for you, time has come for you to move it into your non-custodial wallet.

Having said that, use exchanges for the purpose of trading; don't fall for the misconception that they are "banks" where you can keep your crypto, your crypto bank is your non-custodial wallet that you control and have the keys.

[Synchronice]

I don't understand what connection did you find between Binance updating deposit addresses and this case of Hotbit that pushed you to question whether should we trust centralized exchanges after these accidents or not?
Summarized answer is that you should not hold your coins on exchanges and the basic rule is: Not your keys, not your coins.

But that doesn't mean that you shouldn't use exchanges at all. There are certain financial features that only centralized exchanges can offer, for example margin trading, futures trading, options and so on. If you use these features, you have to use centralized exchanges but if you only want to trade bitcoin to another peer and you don't do it daily, then decentralized exchanges are the best option among available ones.

[Potato Chips]

2. Can we trust them with our money even as all those recent ones are given room for the users to withdraw their funds?
3. And can we depend on this opportunity to allow users to withdraw their funds and keep trusting them?

Of course not. Let's take your example - hotbit for instance. Yes, they are giving people time to withdraw but it's only for a month. This time frame is simply too short for most if not everyone to be able to withdraw everything. Since people's money are already on their pocket, we are almost always at their mercy.

Not to mention, sometimes situation could get worse with CEx's e.g. hacking/exit scam where it's possible you won't have any chance of getting everything back.

Dabbling into CEx is just picking the lesser evil and setting up preventive measures. Don't even think about giving them your full trust.

[sheenshane]

Don't even think about giving them your full trust.

That's what exactly I want to tell.
Entrusting them with our fund is quite tough for us to choose which one of them are reliable enough, as Binance, just because they are one of the largest exchange is one of the factors that people give no choice just to trade and make a profit.

The point here is, never store your coin on CEX for a long period of time, after your trading session, withdraw them all.
If you're in a trading session, we should regularly assess the reliability and security of an exchange, including staying updated about its policies, regulatory compliance, and any changes in its operating procedures just like Binance did.

[noorman0]

If you ask users who have never had a problem, you will only get the answer, "yes, I still believe in my exchange".
Regardless of the preferences you mentioned, actually I don't have much to do with exchanges, the principle is "never trust strangers", that's all. I'm sure that they are doing their basic job, but there can be times when they experience a failure of trust due to systems and management that are broken by the people behind the company who are getting greedy, mishandling, and not understanding the users.

[tabas]

You don't have to trust them, just use them whenever you're in need of their service. You don't keep deposits there as well, so when you trade and wants to withdraw then take it out immediately when you're done doing your trades there. It doesn't have to be big or small amount but just use them as is since they're exchangers. Whether you've got or no problem with them at all and either centralized or decentralized, the lesson from these incidents is that they're just tools for exchanging crypto<->fiat.

[Darker45]

They're not really trusted just to keep our coins. It's just that they're the most convenient trading platforms. For anybody who trades, they've got no choice but to take the risk and send their money to exchanges.

But does it mean that these centralized exchanges can be "fully relied on?" Of course, not. Can we trust them with our money? Not really. There are risks but, again, for a trader who is looking for volumes, pairs, and others, they don't have much choice.

[Tsp_exchange]

i don't trust the centralized exchanges(CEXs) because that my fund is stored on exchange not me.
i am used to trading on CEXs,and stored my fund on defi wallet or DEX because that the CEXs' experience is better than decentralized exchanges(DEXs).
I hope there will be a type exchange that combine the experience of CEXs and the security and transparence of DEXs.

[examplens]

Recently, Binance has changed some deposit addresses for its users, which they said is due to security, and some of the forum users here were on the support list as it is good for such acts for security reasons.

Can you explain what exactly is negative here and why this change of deposit address would be a signal of distrust?
I don't think that CEX exchanges should be trusted indefinitely, even if we are talking about Binance but what you stated is certainly not the reason.

Hotbit Exchange has now announced that all CEX operations will cease as of May 22, 2023, though users will still be able to withdraw all of their funds prior to June 21.  They believe the former management employee, who quit working there in April, was involved in a project that violated Hotbit rules.  (https://hotbit.zendesk.com/hc/en-us/articles/8074249353495)

They don't believe anything, it was like that last year. Hack/theft of part of the funds deposited in that exchange, where some of the culprits were employees of Hotbit. Somehow, they managed to continue their work, it is quite possible that this case completely damaged their reputation and credibility.

However, the possibility of withdrawal in the next month is a much better situation than what we had with FTX, where everything was stopped in a short period of time and without notice.

[CryptopreneurBrainboss]

My questions here are:
1. Can centralized exchanges be fully relied on again?
2. Can we trust them with our money even as all those recent ones are given room for the users to withdraw their funds?
3. And can we depend on this opportunity to allow users to withdraw their funds and keep trusting them?

I feel that if the CEX management does not trust themselves, then why are we trusting them and giving them our coins to keep for us?

They don't trust each other and we shouldn't be trusting anybody as well, those operating centralized exchange are humans and humans can be greedy or have another emotions that leads to theft. These exchange make use of multi signature wallets because of extra security and humans can't be trust especially when large sums of money are involved that crimes can be committed without been caught so they can't fully trust each other. No centralized service should even be trusted to the point of leaving our coins on their platforms. Centralized exchange hasn't had a reason to fully rely on them and they can never have any reason for that.

Don't even store your coins on exchanges as that's not the purpose why we have those platforms existing, they're there as a medium to be used for trading and so shall it remain. Infact if you don't have any legitimate reason to us them then don't use them. Make use of the decentralized exchange for your trading. When exchanges allow their users to withdraw then noted that the reason behind that particular exchange shutting down could be as a result of the SEC pressing down on their necks or low trading volumes and since they can't keep up running a business at a lost so they have to shutdown still that doesn't mean they can be trusted. They might only be doing that to keep a clean reputation.

[BitMaxz]

I'm fine with Binance how they protect their coins and they always do inform users that they are going to change their deposit address and it is their security protocol to avoid the issue in the future.
Unlike other exchanges do not have their own way how to protect customer's funds.

About Hotbit, I trade on their exchange before but almost all coins there are shitcoins they are likely the same as Yobit it is better to close their exchange because there are many complaints about their service like stuck withdrawals until now they don't have the plan to solve this issues.

[Hyphen(-)]

Recently, Binance has changed some deposit addresses for its users, which they said is due to security, and some of the forum users here were on the support list as it is good for such acts for security reasons.

Binance is currently one of the most reputable centralized exchanges, and practically all of their transactions are in good order. Even yet, they cannot be trusted because no one should be trusted with your bitcoin because they will control it as well as other coins.

Hotbit Exchange has now announced that all CEX operations will cease as of May 22, 2023, though users will still be able to withdraw all of their funds prior to June 21. They believe the former management employee, who quit working there in April, was involved in a project that violated Hotbit rules.

Allowing customers to withdraw their coins is a positive sign of trust, because some exchanges will just go bankrupt, taking their users' assets with them. Because Hotbit is a good and renowned exchange, they decided to make this major news because they love their clients and want to resume operations once their issues are resolved.

My questions here are:
1. Can centralized exchanges be fully relied on again?
2. Can we trust them with our money even as all those recent ones are given room for the users to withdraw their funds?
3. And can we depend on this opportunity to allow users to withdraw their funds and keep trusting them?

I feel that if the CEX management does not trust themselves, then why are we trusting them and giving them our coins to keep for us?

We don't trust centralized exchanges, but we utilize them as a market to buy our Bitcoins before moving them to our own wallets, where we have the private key.

[michellee]

People have felt too comfortable with CEXs and it doesn't matter if one CEX closes operations because they still have a list of other CEXs to trade with. And I don't think it will be that hard for people to find CEXs to trade and it won't be a big deal for them. Maybe they need to move their funds to another CEX so they can continue trading again and even though it seems like a hassle, they are okay.

It's up to us to keep trusting CEX or move to DEX because we have to find that comfort to trust it. And CEX, which will close its place, will allow its members to move all their funds elsewhere so that there are no complaints from its members.

And what Hotbit experienced could be a reason for them to close the exchange but Hotbit should have foreseen this before they launched the exchange. And only an exchange that has a solid team can survive the intense competition between exchanges and it's not easy to survive.

[KingsDen]

My questions here are:
1. Can centralized exchanges be fully relied on again?

Yes, we can fully rely on them but only for what they are meant for. You can register there, buy bitcoin and send to your non custodial wallet, that is what they are meant for.
You can send from your non custodial wallet to the exchange, convert your bitcoin to fiat, it is what exchanges are meant for.
But they shouldn't be trusted to serve as wallets to us;
They shouldn't be trusted to keep our money for years in the name of staking.
Those are bad ways to use exchanges. Use them for what they are and you will not have regrets.

[Darker45]

My questions here are:
1. Can centralized exchanges be fully relied on again?

Yes, we can fully rely on them but only for what they are meant for. You can register there, buy bitcoin and send to your non custodial wallet, that is what they are meant for.
You can send from your non custodial wallet to the exchange, convert your bitcoin to fiat, it is what exchanges are meant for.
But they shouldn't be trusted to serve as wallets to us;
They shouldn't be trusted to keep our money for years in the name of staking.
Those are bad ways to use exchanges. Use them for what they are and you will not have regrets.

And what are centralized exchanges? They're not primarily a store where you can buy Bitcoin; more than anything else, they're a trading platform. That's what they are meant for. As such, can we "fully rely on them?" If we use them as trading platforms, "for what they are," are we not going to have regrets? I don't think so.

And what choice does an active trader have but to keep his/her funds in the exchange he/she is using. Even if you're not staking, your money will still remain on exchanges if you are actively trading. You can't just pull out your funds every time your order gets filled. You're burning profit that way.

Did the victims of FTX, Mt. Gox, Cryptopia, QuadrigaCX, and many others not "use them for what they are?"

[Plaguedeath]

This depends on how you define trust on a centralized exchange.

If you mean centralized exchange can be trusted to hold our coins for long term holdings, this obviously all centralized exchanges can't be trusted regardless how good their reputation, popularity, has a refund policy etc.

But if someone just want to want to use centralized as a marketplace and they're don't care with their privacy, centralized exchange can be trusted for them.

[KingsDen]

And what choice does an active trader have but to keep his/her funds in the exchange he/she is using. Even if you're not staking, your money will still remain on exchanges if you are actively trading. You can't just pull out your funds every time your order gets filled. You're burning profit that way.

Well, atleast a trader should first look for a reputable exchange which is not closing down tomorrow and sign up. The first test of security is the trustworthiness of the exchange and based on this, all exchanges are not same as some have proven to be reliable than others.

Did the victims of FTX, Mt. Gox, Cryptopia, QuadrigaCX, and many others not "use them for what they are?"

Exchanges are privileged to recieve more than what they can hold or what they should be trusted to hold. They are used for what they are and even more than. That extra stretch causes the major helm

[Darker45]

And what choice does an active trader have but to keep his/her funds in the exchange he/she is using. Even if you're not staking, your money will still remain on exchanges if you are actively trading. You can't just pull out your funds every time your order gets filled. You're burning profit that way.

Well, atleast a trader should first look for a reputable exchange which is not closing down tomorrow and sign up. The first test of security is the trustworthiness of the exchange and based on this, all exchanges are not same as some have proven to be reliable than others.

Of course, yeah, traders should be looking for the most trusted exchange out there. But who can tell, really? Exchanges are only trusted until they aren't. The ones that I mentioned were trusted exchanges, more "reliable than others." They aren't the ones that are more likely to close shop the following day. They are not to be categorized with the likes of YoBit, HitBTC, and others. But look where they are now.

Did the victims of FTX, Mt. Gox, Cryptopia, QuadrigaCX, and many others not "use them for what they are?"

Exchanges are privileged to recieve more than what they can hold or what they should be trusted to hold. They are used for what they are and even more than. That extra stretch causes the major helm

Failed centralized exchanges are of all kinds and sizes. They didn't die because they were trusted with so much. They simply failed; security failures, financial management failures, whatever.