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

[tbct_mt2]

Bitcoin should not defend on exchanges because bitcoin was created before exchanges come into existence, there is no reason to worry if exchanges keep disappearing as long as you use them the way you are supposed to use them.

Bitcoin needs Bitcoin exchanges and exchanges need Bitcoin existence, between them there is a thing like mutual relationship. There were many big reasons why people in the past felt super excited with first Bitcoin exchanges, then Bitcoin Futures in 2017 and 2018 with CME and CBOE for example.

However there are many ways to trade Bitcoin, and exchanges are only one of available ways. They can trade bitcoin peer to peer, in person too.

Exchange have a sole purpose which is to be used for exchange of coins, and almost, if you use the exchange to buy and sell or convert your crypto to fiat only, you will not panic because you will not have your coins stocked in an exchange, instead your wallet should be a home to your bitcoin.

It's right but even people only want to use exchanges for trading, risk still exists. At the time they fund their accounts with Bitcoin deposits, they have risk of losing their bitcoins. Because exchanges can say they don't receive anything, the account broke exchange's ToS, and they don't allow user withdrawing that fund. Risk of losing your coins immediately starts and does not need to wait till one hour or days, weeks later.

Deposit coin, trade it, withdraw the fund after finishing that trade, it looks fast and perfect but you still have risk of can not withdraw the fund.

[LFC_Bitcoin]

We’re in a bear market, there are always casualties but just like in life, the strongest survive. It is no great loss to see failing businesses  wind down.

At least Bitmex are shutting down in an orderly fashion and not scamming their users like we have seen in previous cycles with the likes of FTX and formerly Gox.

This is capitalism for you, no bail outs. The failing businesses are being weeded out. This is also why we self custody, take away the risk of closing exchanges. Not your keys, not your coins.

[Mate2237]

This is no news if you ask me, that exchange are getting shutting down this has nothing to do with Bitcoin holders. The reason is because exchange are not ment to hold Bitcoin but is surely for the purpose of transacting Bitcoin. Anyone who is keeping his bitcoin in an exchange is risking his assets because that is not encouraged. Because when you keep your Bitcoin in  an exchange you don't actually have full control over your Bitcoin. It's like someone is holding your bitcoin for you so the probability of you losing access to Bitcoin is high.


That exchange are shutting down should be a lesson, when trying to chose an exchange we should always make sure that the exchange we are using is trustworthy. Because these days there are allot of exchanges that one can easily download online that are not reliable. Again scammers too has learned to use this type of method to to siphon money from unsuspecting crypto users, so we need to be more careful when trying to choose an exchange.

[BALIK]

We’re in a bear market, there are always casualties but just like in life, the strongest survive. It is no great loss to see failing businesses  wind down.

At least Bitmex are shutting down in an orderly fashion and not scamming their users like we have seen in previous cycles with the likes of FTX and formerly Gox.

This is capitalism for you, no bail outs. The failing businesses are being weeded out. This is also why we self custody, take away the risk of closing exchanges. Not your keys, not your coins.

In fact, no matter how big an exchange is, it should never be used as a wallet. The job of an exchange is trading, not custody. If I want to hold Bitcoin for a long time, then the private key should be under my control. The saying "Not your keys, not your coins" is not just for scams like FTX. Even an honest exchange can one day close operation due to regulatory pressure or financial reason.

Another thing, those who use exchange also have way to reduce risk. Withdrawing coin quickly when trading is finished, keeping their recovery seeds safe and keeping only what is needed for trading on the exchange, these should be made habit. I cannot control whether the exchange will fail or not. But the decision of whose custody my Bitcoin will be is entirely in my hands.

[snowpega]

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
...

This is the biggest reason why I also don't like exchanges in terms of holding long-term funds on them.
I was reading a message today from a friend who was alerting that if anyone is holding funds on these two exchanges. They should withdraw as soon as possible. This is exactly the biggest reason the majority of people don't trust exchanges for holding their long-term funds. Because you never know when will they shoutdown their services without letting you know about it.

The big thing is that exchanges are also part of shady business, which, if caught by authorities, they have to shutdown thier services.
And if they are scamming, then the chances are higher that the service users are going to lose all the funds on that exchange. This is why use only an exchange for a moment when it is really needed and hold major funds in wallets.

[AmoreJaz]

We’re in a bear market, there are always casualties but just like in life, the strongest survive. It is no great loss to see failing businesses  wind down.

At least Bitmex are shutting down in an orderly fashion and not scamming their users like we have seen in previous cycles with the likes of FTX and formerly Gox.

This is capitalism for you, no bail outs. The failing businesses are being weeded out. This is also why we self custody, take away the risk of closing exchanges. Not your keys, not your coins.

That's the good part, they don't just disappear without a warning. At least, they have informed their clients about their plans to exit the business. And give their customers ample time to withdraw what they have. Not all exchanges can do such initiative.
Just consider Mt. Gox and FTX, I believe these 2 exchanges proved to the crypto community that if your coins are in the exchanges, it is somewhat not your coins anymore as you have no full control of it.

[Sunshine1525]

That's the good part, they don't just disappear without a warning. At least, they have informed their clients about their plans to exit the business. And give their customers ample time to withdraw what they have. Not all exchanges can do such initiative.
Just consider Mt. Gox and FTX, I believe these 2 exchanges proved to the crypto community that if your coins are in the exchanges, it is somewhat not your coins anymore as you have no full control of it.

It's good that Bitmex didn't end up like Mt. Gox and FTX but you can't tell the exchange that would end up being the next with bad intentions so instead of taking chances it's better to practice self custody instead moving funds from one wallet to another whenever an exchange decides to quit their business.

I know that the coldcard drain would cause curiosity concerning the security of self custody wallets but it's not a big deal, one security error shouldn't make people choose third-party wallets over the one that's self custody, cause since that issue occurred there's been better alternatives to properly self custody.

[Curious T]

Bitcoin needs Bitcoin exchanges and exchanges need Bitcoin existence, between them there is a thing like mutual relationship. There were many big reasons why people in the past felt super excited with first Bitcoin exchanges, then Bitcoin Futures in 2017 and 2018 with CME and CBOE for example.

I don't believe Bitcoin needs exchanges. It makes things easier, but I can't say Bitcoin needs it. For Bitcoin to need exchanges, it means Bitcoin can't survive without exchanges, and that is not true. Exchanges were the ones built around Bitcoin's existence, Bitcoin was not built around the existence of exchanges. Meaning, if all exchanges ceased to exist today, Bitcoin will still be here. Its price might not be what it is today, but it would still be here. I can't say the same about exchanges if Bitcoin ceased to exist. Without Bitcoin, every other coin will go to shit, and the exchanges will be irrelevant.

[Just Say]

It is the reason why they're called exchanges, they have never been reliable.

The same way bankers do not trust Crypto and new innovations in the financial space is the same way we shouldn't trust exchanges and it also boils down to binance. I don't know why I see too many people flocking binance because of their favorite Cryptobro and influencer CZ. He has been a role model for most of them so they be dick riding about binance forgetting they're still exchanges.

Worry less about it in general. Do the little awareness you can and focus more on being your own bank and taking full responsibility.

I don't think there's anything relating with holders and exchanges in terms of storing Bitcoin, long term holders should allows go for portfolios that doesn't support third party and most of the exchanges closing gives access to third party so why would holders be worried,  my question is what happens to noncustodial wallets?

Bitcoin is not designed to be held on an exchange platform, so we should keep our Bitcoin holdings in non-custodial wallets because keeping Bitcoin on an exchange carries security risks, company closures, and unregulated risk, but using a non-custodial wallet gives investors full control of the private keys.

Anyone who stores their coin in Binance cause of CZ doesn't value the security of their asset cause same CZ won't give two fucks about them if anything happens to Binance in the future. Bitcoin cause created for self custody so holders shouldn't go against that concept by storing in exchanges.

In fact those who are keeping their Bitcoin on Binance because of CZ, then those exchange users may not value the security of their assets but my idea if something ever happens to Binance, then maybe CZ won't consider the security of users or the security of their assets. Have you noticed that Binance will currently stop transferring money to ten crypto platforms including HTX in accordance with the European Union ban, so it's clear that you shouldn't hold Bitcoin on any exchange for a long time like a fool, but they should be used for P2P and trading.

Binance will stop processing transfers to and from HTX and 10 other crypto platforms on August 23. Anything sent after that date can be held for a compliance review. Binance did not draw up that list. It matches, name for name, the crypto firms in the European Union's latest sanctions package.

[SeriouslyGiveaway]

It's true that those who keep their Bitcoin on Binance because of CZ don't value the security of their assets

Did you mistype it?

Because with me, I feel like people only stored their bitcoins on Binance exchange because they trusted Binance with reasons from the exchange reputation to security as well as transparency of the exchange treasury.

If it is like you posted, people knew that CZ and Binance did not value, did not care too much about security, but still stored coins on Binance, they are too brave and stupid.

but if something ever happens to Binance, then maybe CZ won't consider the security of users or the security of their assets. Have you noticed that Binance will currently stop transferring money to ten crypto platforms including HDX in accordance with the European Union ban, so it's clear that you shouldn't hold Bitcoin on any exchange for a long time like a fool, but they should be used for P2P and trading.

It's about money laundering and Binance already had to pay expensive cost years ago while CZ had to go in jail in the USA for several months too.

Now with more and stricter regulations on AML and KYC around the world, Binance know that as a biggest exchange, they are a favorite target of many governments. So proactively obey existing regulations is a mandatory business operation from Binance if they don't want to get further legal problems.

[MadSl1m]

Z-tight's wind-down versus collapse distinction is the one doing the real work in this thread, and it has a corollary: an orderly wind-down is the good outcome, and you only get it when the business itself decides to quit. BitMart's own notice gives users until January 31, 2027.

I track crypto card programs, and there the same event usually arrives from one level up. The bank or issuing platform above the brand pulls out, and the runway goes with it. When the platform behind Solflare's card wound down in July, cards stopped working a day before the announcement went out. Another issuer pausing a shared onboarding channel ended four wallet-branded card programs on the same day.

Same custody lesson, minus the deadline. A withdrawal window exists when the company leaving is the one that owes you the money.

[Localhostspeed]

In fact, no matter how big an exchange is, it should never be used as a wallet. The job of an exchange is trading, not custody. If I want to hold Bitcoin for a long time, then the private key should be under my control. The saying "Not your keys, not your coins" is not just for scams like FTX. Even an honest exchange can one day close operation due to regulatory pressure or financial reason.

Another thing, those who use exchange also have way to reduce risk. Withdrawing coin quickly when trading is finished, keeping their recovery seeds safe and keeping only what is needed for trading on the exchange, these should be made habit. I cannot control whether the exchange will fail or not. But the decision of whose custody my Bitcoin will be is entirely in my hands.

The bigger an exchange, the more reason why it should be avoided because anytime an exchange that is big is targeted, when they lose money it comes in large quantities and if they want to reimburse people that are affected, they will not be able to pay back people. Mt gox was shutdown because of what they experienced, FTX was shutdown because the team used customers money and till now, most of them are yet to have access to their money.

Bitmart has not allow people to withdraw their money, I saw some posts from the CEO trying to arrest some of his workers in China, the admin handler representing Chinese community that he is fabricating lies against them. Can you imagine the effrontery altitude, people that have their money couldn't withdraw and he is trying to sue people for their money. This is there money, it's not like they gave them loan or any condition but they are restricted.

[Faisal2202]

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?

Exchanges are not the best options for long term holding, especially these low tier exchanges. I would not choose them for spot trading. Binance and Coinbase are better options in my sight due to their regulatory and reserves status. First choice is Coinbase.

But you should not even choose CEXs for holding purposes. Always choose self custodial wallets or buy some HW like Trezor, etc.

Because the recent issue with BitMart, where they have halted the withdrawals after announcing their closure, raised serious problems for the victims. They are filing cases against the founder, etc.

Maybe they will get their funds back. I have not followed the news for the last week now, but this is proof that we should not hold funds on a single exchange, and not for the long term.

[WatChe]

The bigger an exchange, the more reason why it should be avoided because anytime an exchange that is big is targeted, when they lose money it comes in large quantities and if they want to reimburse people that are affected, they will not be able to pay back people. Mt gox was shutdown because of what they experienced, FTX was shutdown because the team used customers money and till now, most of them are yet to have access to their money.

Bitmart has not allow people to withdraw their money, I saw some posts from the CEO trying to arrest some of his workers in China, the admin handler representing Chinese community that he is fabricating lies against them. Can you imagine the effrontery altitude, people that have their money couldn't withdraw and he is trying to sue people for their money. This is there money, it's not like they gave them loan or any condition but they are restricted.

There are many cases where centralised exchanges have ceased account of crypto holders because of unknown reasons. Usually when you have huge number of assets on centralised exchange then they take advantage of their hidden Terms & Conditions and cease assets of crypto owner for their own benefit.

Their is difference between Bitcoin in your non-custodial wallet versus the one stored in exchange. As far as question of OP is concerned, those who have their Bitcoin stored in their non-custodial wallet must not worry about what is happening to centralised exchanges but the one who have their assets on centralised exchange.       

[Chinesebaby]

The bigger an exchange, the more reason why it should be avoided because anytime an exchange that is big is targeted, when they lose money it comes in large quantities and if they want to reimburse people that are affected, they will not be able to pay back people. Mt gox was shutdown because of what they experienced, FTX was shutdown because the team used customers money and till now, most of them are yet to have access to their money.
.

For me, I think the reverse should be the case, because the bigger a crypto exchange is, the more money they are likely to spend on security of its platform, in other to protect its customers funds. Because let's take Binance for example, we definitely can't compare how much Binance spend on security to other small crypto exchanges. And yet for that reason, its still not an excuse for people not to prioritize the safety of their Bitcoin on non custodial wallets, rather than leaving it on a crypto exchange where they do not have control over its private keys. And recently, it's no doubt that most smaller exchanges seems to be closing down it's operation due to reasons nobody knows. And it's obvious this might be related to regulatory policies that is forcing them to close down. And we just hope our major exchange don't follow suits, because it will definitely affect the Bitcoin community globally.

[Emeraldo]

For me, I think the reverse should be the case, because the bigger a crypto exchange is, the more money they are likely to spend on security of its platform, in other to protect its customers funds. Because let's take Binance for example, we definitely can't compare how much Binance spend on security to other small crypto exchanges.

It is the duty of an exchange to provide adequate security for their users so they can continue to enjoy the features that will make them keep coming to use the platform for trading and transactions. We have seen several hacks that worth billions from different exchanges and this had made so many exchanges to spend more on the security of their users or they will be forced to close without option due to the risk of going bankrupt if they get hacked. There are insider reasons why we are seeing several exchanges exiting the crypto market and this is for their safety instead of running at a loss.

[Issa56]

Despite all the past experiences with exchanges people still ignore the risk and store their coins on them, trusting someone else with your coins is risky and it's why centralized exchanges are not to be trusted. People ought to have known that exchanges are not reliable by now.

No matter how you preach against leaving coin on exchange, some people are not just going to listen to you, some of them are so confident in the exchange which they are using, and they believe nothing can happen to the exchange, but they don’t know that their is no exchange thats too big to be compromised, so that’s just the reason why we shouldn’t leave our coin on any exchange even if it’s a reputable one.

It’s high time people treat exchange as a market place, just buy your bitcoin from there, then withdraw it to your wallet, it’s not suppose to be kept on the exchange, because if anything happens to the exchange, your funds is gone also.

If we can take our time to do some research about some exchanges that have  closed down in the past, and the amount of money which people lost in those exchanges, then it’s going to discourage lots of people from leaving their coins on exchange, but most people don’t take their time to do some research.

[NodeMystic]

Bitcoin holdings and exchange shutdowns are not the same thing. When any exchange loses its money or gets scammed by someone, then that exchange becomes indebted. So, they shut down their exchange.

You should keep your bitcoin holdings in a hardware wallet or a non-custodial wallet. When you try to withdraw or transfer your bitcoin, you can then do it easily.

[lionheart78]

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

Keeping our coins won't be a problem even if there are no exchanges.  Each cryptocurrency has its own wallet.  So we just need to download the wallet of the cryptocurrency we are holding and keep our cryptocurrency on that wallet.  This should be the SOP ( use non-custodial wallet), not us relying on exchanges to keep our coins

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

We don't need to remove exchanges because we need them to trade our cryptocurrency, but in terms of holding our coins, we should avoid keeping them on exchanges for storage.  A non-custodial wallet is always the preferred safer means of holding our coins.

[Hazink]

You shouldn't be suprised mate, that account is a newbie account and from his statement i don't think he's well knowledgeable about Bitcoin cause first off he won't be worried about those exchanges shutting down if he's a holder, expect he's trading with any of them. Real investors would never want a third party to have access to their coins and would use wallets that gives them self custody, well from the response he's got i believe he'll learn, i expect him to.

Some people are holding bitcoin, but they have so much fear in them in terms of news relating to exchange shutdown, and let's also not forget that when some major exchanges crash the effect is always visible on the price of bitcoin. The OP might be worried that it could also be that the op is just a newbie which don't know much of how bitcoin works, another thing again is some people came to know about crypto through all this centralized exchange ads so don't blame the op too much for his little knowledge.