Why it is risky to leave your assets in a Centralized Exchanges for too long.

[Joeboy]

         Most persons who are new to cryptocurrency, have always made a habit of always storing their coins in centralized exchanges like Binance, Kucoin etc. Well from my own experience I don't really think it is the best thing to do. Dont get me wrong guys, it not like am trying to condemn any exchange, coz as you know the centralized exchanges has their uses one of which is a quick access and quick trades etc. However the reality of the matter is that you have little or no control over you assets, the exchange does, and this means that if anything  goes wrong, things like maybe the exchange going bankrupt, or  something like the exchange being hacked, you could lose every of your life saving in a split of a second. We definitely have seen this happen with FtX in 2022, Mt Gox in 2014, and even so may like that. Users of those platforms at first thought it was a dream until reality dawned on them that they have lost everything they worked so hard to get.
         So in essence, like have said Centralized exchanges are not bad, it just that they are not really built for long term storage. After you trade it better to move your assets to somewhere safer like a Non custodial wallet e.g Metamask, Trust Wallet, where you will given a private key and this private key gives you full control over your account.
DISCLAIMERS: Am not in affiliation with any exchange or promoting any exchange, this post is strictly for educational purpose.

[Joy_learns_crypto]

 
DISCLAIMERS: Am not in affiliation with any exchange or promoting any exchange, this post is strictly for educational purpose.

Hahaha why you dey do like say you Dey fear? This is not a new topic here the thing be say weda centralized oh or  decentralized exchanges avoid keeping your asset on any exchange for a long time.
But contrary to what you said about those exchanges not being built to store asset, those exchanges has no problem storing your asset and just like banks would love it when you don’t withdraw your money those exchanges would prefer you leaving your asset there but you just have to consider the risk and your own interest over the interest of an exchange.

[Joy- maker]

        Most persons who are new to cryptocurrency, have always made a habit of always storing their coins in centralized exchanges like Binance, Kucoin etc. Well from my own experience I don't really think it is the best thing to do. Dont get me wrong guys, it not like am trying to condemn any exchange, coz as you know the centralized exchanges has their uses one of which is a quick access and quick trades etc. However the reality of the matter is that you have little or no control over you assets, the exchange does, and this means that if anything  goes wrong, things like maybe the exchange going bankrupt, or  something like the exchange being hacked, you could lose every of your life saving in a split of a second. We definitely have seen this happen with FtX in 2022, Mt Gox in 2014, and even so may like that. Users of those platforms at first thought it was a dream until reality dawned on them that they have lost everything they worked so hard to get.
         So in essence, like have said Centralized exchanges are not bad, it just that they are not really built for long term storage. After you trade it better to move your assets to somewhere safer like a Non custodial wallet e.g Metamask, Trust Wallet, where you will given a private key and this private key gives you full control over your account.
DISCLAIMERS: Am not in affiliation with any exchange or promoting any exchange, this post is strictly for educational purpose.

if you leave your coins in a centralize exchange like bybit or binance it is not your key, and it is not your coins, because those centralize exchanges are the main targets for hackers and if those hackers eventually hacked that centralize exchange where you kept your coins all your coins is lost and gone, that's why will also advise everyone to store their coins in a custodial wallet like software wallet, paper wallet or hardware wallet and also store their key phrase in a safe place where no won can find them.

[EarnOnVictor]

        Most persons who are new to cryptocurrency, have always made a habit of always storing their coins in centralized exchanges like Binance, Kucoin etc. Well from my own experience I don't really think it is the best thing to do. Dont get me wrong guys, it not like am trying to condemn any exchange

You are saying the right thing, so I do not see a reason why anyone should get you wrong.

CEX is for the immediate business, payment, trading/investment, it is not for the long-term holding and is never to be trusted for a large sum. If at all you are tempted to deal with CEX with a big amount, which I don't recommend, you should never use one CEX, otherwise, they might be greedy and might not give you your money again. And if you eventually get your money back, what about the stress they caused you and the delay in accessing your money? People lament online daily about CEX, so one should be careful with them because they can do whatever they like since they hold the custody of your money.

DEX and other self-custody wallets are the best if they can serve you for whatever reason you need them for. But if they can't, use CEX cautiously and always know that "Not Your Keys, Not Your Money."

[AVE5]

If I should respond by the thread title, I'd recall us back to the phrase that says "NOT YOUR KEY NOT YOUR COIN" and of which, since the exchange doesn't generate it users seed phrases to be self custodial of their funds in the centralized networks, users storing their digital assets in there stands to be vulnerable of loosing it funds because the exchange sever doesn't solicit for users Privacies. Instead, they provides users with private keys to log into the network while they holds a public key that gives the website the permission of accessing your funds without your consent.
This limited security system makes users of the centralized exchange vulnerable because once scammers are able to get access by breaking the website security protocol, they could as well have access to your funds and steal it.
So the risk of keeping your funds for too long in the exchange is that you don't know when the hackers will launch attack on the centralized network. Maybe could be when you're actively holding on the exchange.

Another simple risk of holding your assets on such network is the simple step of logging in the platform with just passkeys such as face caption, password or biometric. So that could be detectable by someone close to you when you're logging in to access your wallet. Though depends how concious you're with your environment.

[Odohu]

It is not only risky to leave your assets in a centralized exchange for two long but even for a very short time. I understand that buying bitcoin in Nigeria is mostly through CEX since due to restrictions in FX in our debit cards most of us cannot use platforms like Bisg exchange. Therefore, part of the things to do as a Nigerian buying Bitcoin from CEX or even trading Bitcoin there include:

-Regular withdrawal such as weekly or bi-weekly for those using the DCA method to buy. This means you will only expose your weekly Bitcoin or monthly collection to risk at any point in time and not your entire Bitcoin collection.

-For those trading in CEX, only leave the amount you want to trade with in your account and if you make profits, withdraw it to a private wallet where you control the private keys. Remember the popular saying "not your keys, not your coins"

[CryptSafe]

At first, before you register with a CEX, you agree to their terms and conditions, which clearly state that they can not guarantee the safety of your assets, you are advised to keep your login details safely. Not only that, you accept whatever the out come maybe in the course of keeping your assets under their custody and by seeing all these, one should know immediately that these are red flags and they still ignore them.

Keeping or holding assets in CEX is never advisable to do because you do not have full custody of the private keys to the wallet holding your assets but you can only withdraw on their approval to get your assets which is just nonsensical, what if the case of  regulations comes up, you are stuck because you can not withdraw immediately and you will have to undergo processes before you get your assets.

Nevertheless, CEX is a no privacy setup crypto platform which would warrant you to undergo kyc before you deposit as they are under government regulations which is against the major reasons for which crypto was created. So you signing up with CEX means you forgoing your privacy by letting the CEX know who you are in accordance to the existing laws of the land in which they exist.

So now you see why some people would always say "Not your keys, not your coin" referring to the CEX

[sokani]

When you keep your funds for exchange e no dey your hands again, nah the exchange hands e dey. If the exchange go bankrupt, get hacked or shutdown, you fit no get back your coins. Naim make dem say "not your keys, not your coins." So like dis, e no dey advisable to store funds for exchange. Except nah trader wey you be, naim you fit keep small portion of your funds wey you go dey use for trading.

[rachael9385]

It's risky to keep your assets in a cex because you do not have control over your assets. Your assets are being controlled by the platform and it's risky because it can be hacked, it can also be closed down if it's used for money laundering. So it's preferable you use the DEX to store all your assets or you use a personal wallet to keep all your assets so that you can have your oen private key.
Remember not your key not your coin.

[Odusko]

Not your keys, not your coins, what that simply means is that, whatever Wallet that you are using to store your assets that you don't have a recovery keys on, it means your coins are at risk and at the mercy of the custodial Wallet owner, unlike in your own Bitcoin wallet where you have full control of both your coins and your wallet, that is you can delete and recover your wallet via the private keys generates that represents your wallet control, and in your own wallet no one can easily hold on to your coins, which means you are in full control, exchange wallet is never built for long term storage, it should be treated as just a business stop where one can exchange one coin to another then transfer them back to your own wallet for safe keeping.

[1miau]

OP is really good advice which we need to save our coins from hackers and criminals. It is always easy to store our coins at a centralized exchange but is is also very risky to do so because a hack can happen any time.
We can only make aware of how dangerous it really is to keep our coins at centralized Exchanges, which OP did here very well.

[Kelward]

OP is really good advice which we need to save our coins from hackers and criminals. It is always easy to store our coins at a centralized exchange but is is also very risky to do so because a hack can happen any time.
We can only make aware of how dangerous it really is to keep our coins at centralized Exchanges, which OP did here very well.

Information is power and anybody wey de leave dem coins for exchanges wey no be for exchange purposes na risk dem de take. We don hear about stories of exchanges wey dem don hack and till today dem customers coins don go despite di promises wey di exchanges de give dem. Only leave di amount of coins wey you want to use for exchange purposes, dat na why dem name be exchanges, dem platforms na basically for business purposes. Di biggest lessons wey I learn for dis forum as a newbie then be "not your keys not your coins" and "store your coins in a none custodial wallet".

Bitcoin de decentralized and we as holders suppose to be sole custodians of our Bitcoin, na dat one go complete di privacy and freedom to hold am. I believe say most people wey de leave dem coins for exchanges na because of ignorance, dem no know say exchanges fit to experience hacks and bankruptcy. Dat na why I talk say information is power, make we try to de do research before we go put our hard earned money for where no de very safe.

[SatoPrincess]

You’re right OP. Not your keys Not your coins. It’s a known fact by now but some people will still choose to learn the hard way. They are so used to putting their trust in big corporations that it’s hard for them to accept that they can lose money storing their coins on an exchange. Mt Gox, and FTX are good examples but what about our very own Patricia, I still see the founder posting luxury lifestyle online. Have Patricia refunded all their users the funds that were supposedly stolen by hackers?

[Fiasem20]

To store your digital asset for centralized exchange dey extremely risky,to store your digital asset for centralized platform mean say you dey give a third party to have control over your asset.Na because of centralized exchange na dem derive this term "not your keys not your coins",when you no get access of your private keys then you no get control over your coins, anything fit happen,we don hear plenty tori about centralized exchanges wey dem don hack and many wey don undergo bankruptcy.The purpose of centralized exchanges na to trade,sell and buy digital assets,no let that hosted wallet wey dey for CEX deceive you as a crypto user.Use hardware wallet for a long term storage or non custodial wallets.

[Jegileman]

        So in essence, like have said Centralized exchanges are not bad, it just that they are not really built for long term storage. After you trade it better to move your assets to somewhere safer like a Non custodial wallet e.g Metamask, Trust Wallet, where you will given a private key and this private key gives you full control over your account.

With the name given to centralized exchanges, the word ‘exchange’ simply means to change something into another thing, that’s what the main purpose of exchanges are for. They are used to change cryptocurrencies from one form to another, most particularly they’re used to buy crypto through the use of fiat. Another thing we can found in only exchanges is trading, you can’t trade on non-custodial wallets, it just have to be an exchange account you can trade with. If you’re able to know the main purpose of which exchanges are used for, you’ll distant yourself from having anything to do with saving funds in those exchanges.

They’re very susceptible to bankruptcy, hacking, centralized censorship etc. If you know all this and still decides to save money in this exchanges, it’s at your own peril. Some exchanges can show very strong security in their operations, but it is never enough to leave your funds confidently in those exchanges, they can fall at anytime, none of them is above facing any challenges that will lead them to shutting down but hopefully they don’t happen.

[Hyphen(-)]

So in essence, like have said Centralized exchanges are not bad, it just that they are not really built for long term storage. After you trade it better to move your assets to somewhere safer like a Non custodial wallet e.g Metamask, Trust Wallet, where you will given a private key and this private key gives you full control over your account.
DISCLAIMERS: Am not in affiliation with any exchange or promoting any exchange, this post is strictly for educational purpose.

Leaving your crypto coin in an exchange is your choice, but no one will be responsible if anything happen to them at anytime because exchanges can shutdown for no reasons and you have no one to blame if it really happen without notice because no one will help you look for your money.

Your personal wallets you are safe with are the best place to keep your coin for future. MetaMask, Trust wallet and others are not bad either because they are accessible on phones, but I don’t think they are also safe because they are closed-source wallets that one can easily get access to your private key and take control or hack your wallet to take all your money.

Therefore, the best advice for you is to make sure you use a reputable wallet like Electrun or Bluewallet and make sure you know how to keep your private key safe; furthermore, use exchanges for their main purpose which is trade, and then send your coins to your personal wallet once you are done.

[Antotena]

  So in essence, like have said Centralized exchanges are not bad, it just that they are not really built for long term storage. After you trade it better to move your assets to somewhere safer like a Non custodial wallet e.g Metamask, Trust Wallet, where you will given a private key and this private key gives you full control over your account.
DISCLAIMERS: Am not in affiliation with any exchange or promoting any exchange, this post is strictly for educational purpose.

Are centralized exchanges bad? Yes! Do I used them, yes but for what they are meant to do. Centralized exchanges are basically what we used to trade, buy sell and also make use of p2p functionalities to have access to fiat liquidity and once my money has been withdraw, that's it. They don't see me again on the exchange until I have something to trade again, never for a place to hold my coins, I wouldn't even feel comfortable doing such thing.

Sometimes, I don't blame people that used exchanges for storage, it's the lack of orientation many people don't have. Not everyone get to pass this forum where you properly see the red flags of centralized exchanges, they are glued to centralized exchanges like it's their family house and one bad thing about them is that there is nothing you will say about them that will convince them, they feel like you are the one that doesn't understand how centralized exchanges work.

[Obari]

Firstly the major role of a centralized exchange is typically for trades and exchanges and not intended to stir up coins on there and anyone who stores coin on there is doing so at their own risk and these have been over the time warned and frown against and just like with the cases scenarios you gave as example are supposed to reach us great lessons not to store our coins and assets on centralized exchanges

OP is really good advice which we need to save our coins from hackers and criminals. It is always easy to store our coins at a centralized exchange but is is also very risky to do so because a hack can happen any time.
We can only make aware of how dangerous it really is to keep our coins at centralized Exchanges, which OP did here very well.

Exactly, when we leave our coins in centralized Exchange, we are already at the risk of scam and it can happen at anytime and leaving our coins in centralized exchanges simply means that we’re letting other people take custody of our asset which is already against the basic concept of bitcoin and cryptocurrency.

[GPVibes]

It is always easy to store our coins at a centralized exchange but is is also very risky to do so because a hack can happen any time.

Always easy might be misconstrued to mean easy in the sense of not being difficult to register or being preferred more than decentralized exchange, they both have almost same structure of signing up. But I think what you are trying to say is that people use CEX alot more than DEX either because of it popularity and their numbers available that gives easy access or its functions of P2P and different kinds of trading facilities including spot, futures. arbitrage trading.

I believe the popularity makes it easier for a newbie to be introduced to them because they easily come to our lips and they may become the choice as they have liquidity from large number of visitors coming in and out of the exchange creating volume both for the centralized exchange and the coins there both low value coin. Another factor that makes it always easy is that they have customer complaint service that will respond directly to issues or challenges faced. However, decentralized exchange are susceptible to hack unlike centralized exchange just like you pointed out too.

[Cossyblack]

I think it's risky because keeping your asset in a centralized exchanges means you're trusting a third party entirely to safe guard or keep your asset protected and by so doing,the exchange now have complete control over your asset and might decide to do whatever they want with your valuable asset while putting your interest at risk. We have also witnessed series of top reputable Centralized exchanges being hacked causing severe damages that have resulted to users loosing all of their asset without any possible solution of recovering the stolen funds. Sometimes this exchanges can also get bankrupted and users funds/asset may go off the radar.
I simply understand that most users still prefer using Centralized exchanges because it's completely easy to use for crypto transactions but considering all the possible risk involved is an enough reason not to keep our  valuable assets with them, rather than CEX, a non custodian wallet is safer to store our valuable asset because it's cannot be hacked and it also gives the user complete control of his asset.