Some crypto exchanges are shutting down, should bitcoin holders be worried?

[Myleschetty]

Some crypto exchanges have been shorting down lately
Exchanges like BitMart, BitMex.......
They have been around for some years now but somehow they shutdown
This got me thinking about people that keep their bitcoin on exchanges

If you buy and keep bitcoin on an exchange, you trust them to keep your bitcoin safe and let you withdraw anytime you want to withdraw
But what happens when they shutdown?

You lose your Bitcoin because you trusted third parties and don't adhere to the standard BTC concept. Because Bitcoin holders practice self-custody, there is no reason for them to be concerned about some CEX shutting down their service, while those that use CEX for holding are either active traders, beginners, or convenience seekers.

You might have problem getting your bitcoin back depending on what's happening with the exchange

Yes, and thts the reward of not listening to the advice of "not your keys, not your coins"

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

Just keep your coin in a non-custodial wallet.

[Crypto Library]

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

Actually, it doesn't take that many incidents, meaning that you will learn this lesson before the entire exchange platform is shut down that you should not hold any funds in centralized wallets.

As I learned, I used to use kucoin and was promoting a platform's signature on another forum and I used to take the payment for that signature promotion directly in the centralized exchanger. Suddenly one day I saw that the bitcoin transactions had been confirmed but still they were not added to my account. Later, I was emailed by the exchanger that my account had been suspended because my funds came from a blacklisted wallet. And whenever this happened to me, I immediately withdrew a larger amount of funds I had on another centralized platform.

And from this incident, I have basically learned that the saying "not your keys, not your coin" is indeed true. I think I will use the centralized exchanger whenever I need to and immediately transfer the funds back to the non-custodial wallet after use.

[ZAINmalik75]

Bitcoin holders or users who have money in an exchange should only worry if the exchange decides to make a scam exit and decides to don't allow their users to withdraw their funds, but that doesn't happen in general, because an exchange that decides to close down its services will make an announcement and let their users know that they will be closing and the users should withdraw their funds before a specified date. So it is not that the exchanges you mentioned are going to run away with the funds of their users. Also, the closure of an exchange cannot be because of the market condition, but it can be because of a lack of users, because no matter what the market condition is, there will always be traders, see Binance as an example.

However, this doesn't mean people should keep their funds in exchanges. Wallets are created for a reason, they are created so that people can store their funds in them and have complete access to their funds without the fear of a loss or a closure, but then again, you have to use self custody, don't again use a wallet that is custodial and will have the possibility of shutting down in the future because then it won't be any different than keeping your funds in an exchange.

[Z-tight]

Someone I know have $300 Bitcoin on Bitmart, still not sure if later got it out by now.

Bitmart didn't collapse, neither did BitMEX. There is a clear distinction between an exchange collapsing, E.G. ftx, and one that is shutting down operations, E.G. LocalMonero, Bitmart, BitMEX, etc.

Customers of Bitmart have until January 31, 2027 to withdraw their funds, so whoever has that $300 has a long time to withdraw it. These exchanges have promised an orderly wind-down process and i hope it is. Because it is common when an exchange is shutting down, that it suddenly becomes very difficult for customers to pass the necessary verifications to claim their funds, and i hope that wouldn't be the case here.

[tabas]

Because it is common when an exchange is shutting down, that it suddenly becomes very difficult for customers to pass the necessary verifications to claim their funds, and i hope that wouldn't be the case here.

Hopefully it won't be because they're already leaving the market and there's no way that they'll want to receive more claims and cases from the users who would have problems in withdrawal. And this results to why we always say that getting a hardware wallet is significant and recommended. You're confident and will not think of anything as this that where you're storing it might collapse or announce closure. I guess that the thread has served its purpose as we get more repetitive answers about the whole point of using only a non custodial wallet.

[salad daging]

For a smooth trading experience, I have been using centralised exchanges, but only from the top and highly reputable. And after completing the trade, I move my funds into a hardware wallet. So you may do the same thing as well; I am not holding any big amount to the exchange.

That's also what we do, exchanges are only limited to crossing assets to trade or exchange BTC/crypto to fiat, we also buy BTC on exchanges and withdraw to HW wallets.
There are also daily traders they will store their assets on the exchange to continue to rotate so that they can be profitable, this also does not matter as long as the exchange is top level.

Someone I know have $300 Bitcoin on Bitmart, still not sure if later got it out by now.

Bitmart didn't collapse, neither did BitMEX. There is a clear distinction between an exchange collapsing, E.G. ftx, and one that is shutting down operations, E.G. LocalMonero, Bitmart, BitMEX, etc.

A little patience the withdrawal will definitely arrive, I saw this complaint on X and Bitmart has confirmed a high surge in withdrawals, which is why it is delayed.

I think this is not a drama like FTX.

[Bd officer]

If you buy and keep bitcoin on an exchange, you trust them to keep your bitcoin safe and let you withdraw anytime you want to withdraw
But what happens when they shutdown?
...........
If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

I don't see any reason for Bitcoin holders to worry here. Why would they worry about this? Long-term holders never keep their funds on centralized exchanges, they keep them in decentralized wallets. However, those who choose centralized exchanges for long-term holding, I think they are stupid. You can say that traders can be worried here, but as far as I know, there is an opportunity for users to withdraw money from these exchanges.

Personally, I buy BTC from exchanges but transfer them to decentralized wallets. A few days ago I lost $155 on KuCoin exchange because my account was temporarily suspended.
Anyway, centralized exchanges or third parties are never safe, so never use centralized exchanges to hold Bitcoin, you use decentralized wallets.

[macson]

If an exchange can disappear anytime, where should we really consider keeping our coin?

Exchanges aren't the only place to store your coins. There are self-custody wallets where you can safely store your coins, and they're much more recommended than exchanges because they give you full control over your coins.

Should we leave exchange completely and switch to a non custodial wallet?

From the start, it was recommended to avoid using exchanges and instead use self-custody wallets. This isn't the first time an exchange has gone bankrupt, so people should be aware of the risks. However, the decision to use an exchange or not is entirely yours.

[Cookdata]

There is no problem if the exchange goes off and investors do not need to worry. They will only have to take their investments to self-custody from the exchanges that go off. Because self-custody is the safest for long-term holders. Long-term investors do not need to worry about these issues. If someone is thinking of investing for 4-10 years, then these are not an issue for them. Those who only trade should worry about these issues. But for a long-term Bitcoin holder, it would be better to use self-custody instead of using an exchange.

Ahhh! They, need to worry. There funds are still stuck on the exchange, they are trying to slow down the process by asking for kyc requirements they have done some years back. This is what you get when you don't be your keys by the way.

I'm still not convinced enough why the sudden exit of the exchange, there are no reason why the exchange should quit working now. I check their volume in the last 2 years and the last weekly volume the exchange trades was in the range it traded in the last 2 years, which means if the exchange decided to quit that day, then it means they have been suffering for a very long time, they were not fit to be an exchange, they were just managing until now and decided to close down in this bear market. This doesn't affect Bitcoin in any way, I don't know why OP is afraid or relating it to Bitcoin.

[HelliumZ]

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

As always, one important thing to remember is to never keep your crypto currency in any central exchange because if they shut down and you can't withdraw within a certain limit, you will never be able to withdraw your crypto assets. Bitmart, BitMEX are shutting down and have set a limit for customers to create new accounts, deposit and withdraw after which no new services will be available. The only solution in this case is to quickly withdraw your crypto assets from those exchanges and hold them in a non-custodial wallet. Another thing to remember is that you should never keep your crypto currency in any third-party account because they can shut down their operations forever at any time.

[Z-tight]

I'm still not convinced enough why the sudden exit of the exchange, there are no reason why the exchange should quit working now.

The reason is obviously competition, these exchanges can no longer compete with the top tier exchanges, like Binance, Bybit, Coinbase and others. Their market share is on the decline, so is their revenue, you'd have to agree with them that the best course of action is simply to wind down operations.

Bitmart also suffered huge losses from hack in 2021, losses amounted to ~ $196m. It is hard to tell if they ever fully recovered from this huge loss, but i don't think they did and that could have played a part in their eventual end.

[Fiatless]

It is non of your business if centralised exchanges are collapsing, let them all die but make sure you are running a non-custodial wallet, this is the only way to stay out of the crashes.

There are too many Bitcoin wallet in the world today, I will never understand why many people still choose to leave their Bitcoin on any exchanges and still be able to sleep peacefully at night.

Someone I know have $300 Bitcoin on Bitmart, still not sure if later got it out by now.

Centralised exchanges have some role to play in the crypto ecosystem. They serve as middlemen between the buyers and sellers. Bitcoin and other cryptocurrencies were not designed to be exchanged this way, but the government and some institutions are pushing centralization. Some people might not be able to trade cryptocurrencies without these exchanges.

The fall of the exchanges might not concern those who keep their funds on non custodians wallet. However I could have a ripple effect on the industry. It could lead to a loss of confidence in those who intend to buy Bitcoin. It could also be used as a yardstick to judge or attack the industry. The effects of the fall of MtGox and FTX are typical examples.

[alastantiger]

but if you already have your coins with you under a non-costodial storage, nothing to worry about in this regard than for you to maintain holding your keys in such a way that prevent any third party from having access to it, this is where we can learn more about security and privacy in Bitcoin wallet for our safety.

People that are holding their bitcoin on an exchange are the people that should be worried because the exchange can exit at any time and they will be running away with customer's funds but if you are holding your Bitcoin in your Non custodial wallet then you will not be affected. It has always been the best advice to hold your bitcoin in your personal wallet instead of trusting exchanges, centralized exchanges is just a medium for you trading and has no right to be holding your bitcoin for a  longer term as it should only be for the duration of your trade, If you decide to ignore this then it is your fault if you lose access to your Bitcoin.

[blockman]

Exchanges aren't the only place to store your coins.

Pretty much not define it as a place to store coins but to trade/exchange. There's still plenty of holders that considers it as a storage even it's not. They will start to learn the importance of what people are saying here when it happens to them, although I never wish it happens to anybody.

The effects of the fall of MtGox and FTX are typical examples.

The closure of the exchanges lately are in different reasons compared to FTX and Mtgox. Their volumes have gone low and the regulations made things harder for them to proceed and should have helped them increase their volume.

[Pandorak]

In this case, personally, i’ve never left that much there, i transfer it to a non-custodial wallet as soon as it reaches a certain amount, especially right now, when things are chaotic, there’s so much bad news, and the economy is struggling. You need to think critically about how to secure your Bitcoin.

Should we leave exchange completely and switch to a non custodial wallet?

That's how it should be, an exchange is simply a trading platform. Keeping your Bitcoin on an exchange only increases the risk, it’s like entrusting your money to someone else/a third party and hoping it will remain safe forever. In reality, there’s no guarantee that the exchange will return your Bitcoin if things go south and the exchange is forced to shut down. So the best option is still to store it yourself.

[Fiatless]

The effects of the fall of MtGox and FTX are typical examples.

The closure of the exchanges lately are in different reasons compared to FTX and Mtgox. Their volumes have gone low and the regulations made things harder for them to proceed and should have helped them increase their volume.

I get your point, mate. But I was responding to a post where the writer said that let all the exchanges collapse and even die. The case of FTX and Mt Gox is different because they collapsed without warning. Meanwhile, the current ones are not collapsing but winding up. They didn't just suspend withdrawals like FTX and others but gave users time to withdraw their funds. But you and I know that if all exchanges collapse, it wouldn't be good for the crypto industry. The shutting down of BitMart and BitMEX is no big deal since they are not major exchanges.

[AprilioMP]

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

An exchange is not a place to store coins. An exchange is a place to buy and sell, although some exchanges, such as Binance, do offer wallet features.
People worry that when an exchange experiences issues—as has happened with some exchanges in the past—it may not function as it should.
There is no recommendation for coin owners to store their coins on an exchange; instead, coins should be stored in a wallet that is not affiliated with the exchange.

[citywise2]

If an exchange can disappear anytime, where should we really consider keeping our coin?
Should we leave exchange completely and switch to a non custodial wallet?

It helps to always remember that exchanges are not to be  mistaken for banks so when you choose to leave you cryptos there, you should first understand your risk. I lost 3 LTC some years ago when an exchange went under and since then I advised myself better.  Any coin you leave in any exchange is not really yours until you place it a wallet where you have the keys