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

[noorman0]

I checked and found out that Binance has always had a 4 to 8% surplus over their customers' liabilities, like if I own 100 BTC, they will have 104 to 108 BTC for my funds, so this makes them a better choice over BitMEX or BitMart.

However, I doubt they have no other obligations beyond their liabilities to users which most people feel reassured by the current risk management approach. Even the explanation of PoR itself acknowledges its limitations, as it typically consists of a snapshot and does not encompass all off-chain liabilities. My point is that certain financial situations could put pressure on their internal spending, and it is entirely possible that a 4–8% surplus could be misappropriated.

[G_Besar]

I don't think an exchange's shutdown is necessarily an imminent danger to Bitcoin. The more important one is for users who still have their coins based on these centralized exchanges, as they rely on the exchange's financial stability and availability. But self-custody will take away a lot of that counterparty risk, with the added burden of having to secure your own keys. Instead of fretting over every time the exchange closes, Bitcoin should be more concerned about where the Bitcoin is stored and if they have the private keys in hand.

I also think so, because exchange closures only harm the exchanges themselves, not Bitcoin. As we've seen, exchanges consistently earn service fees through their users and through every transaction made by their users. Bitcoin will remain strong because it's fundamentally independent of any exchange. Furthermore, when one exchange closes, the possibility of a new one emerging exists, so Bitcoin holders who hold Bitcoin in their own personal wallets needn't worry about this, as there are still many exchanges operating.

[nikola22]

I checked and found out that Binance has always had a 4 to 8% surplus over their customers' liabilities, like if I own 100 BTC, they will have 104 to 108 BTC for my funds, so this makes them a better choice over BitMEX or BitMart.

Yes, closure of small exchanges is a good thing, but they should not hold onto the user's funds, no matter how much value they are of. They should always allow them to withdraw their coins and tokens easily, but BitMart and other exchanges have chosen not to because the founder thought they could get away with the funds.

Binance makes good money with high turnover so I'd be surprised if they didn't have a margin of safety. regarding smaller exchanges, a lot depends on the honesty of their owners. unfortunately, not all of them are honest and return users' money. it's important that they are held accountable by law enforcement. then such cases might become less common. and users themselves should develop technical skills and use self-custody for their funds.

[AmaGold70]

This is the reason why it is not advisable at all to store your bitcoin in an exchange because they can shutdown or withdraw their services at any point in time. Before now, I stored bitcoin, and other cryptocurrencies in some exchanges, and some of this exchanges shutdown, and I could not recover my cryptocurrency assets. It is often sounded here that investors should avoid storing their bitcoin in exchanges because they are not reliable, they can shutdown anytime, and scammers can also easily attack them.
There are reasons why I feel exchanges can shutdown or withdraw there services in a given area, sometimes it could be that they are not comfortable with the conditions attached to their services such as task rate or they don't have the expected number of users in that very area of operations or it could also be as a result attack from scammers, these are some of the things that can make exchanges to shutdown, and that is why users should be very much careful, and avoid storing their bitcoin in exchanges.

[Muskanrani]

Its not new for exchanges to shut down there are many exchanges are closed before now it does not make any specific  difference to Bitcoin and Crypto markets but this thing became anaxious for new traders specially for those traders who keep their money in exchanges rather then wallets and mostly new users make this mistake .

[Faisal2202]

Binance makes good money with high turnover so I'd be surprised if they didn't have a margin of safety. regarding smaller exchanges, a lot depends on the honesty of their owners. unfortunately, not all of them are honest and return users' money. it's important that they are held accountable by law enforcement. then such cases might become less common. and users themselves should develop technical skills and use self-custody for their funds.

The surplus is good, but we don't have any way to recheck it publicly. It is just what Binance has claimed to have, but what I think is that if there is any dishonesty in this, then it should have been used against Binance by the competitors already. But if there is none, then that's why it is still around, and I also believe this way of assuming things is wrong.

Because building a system that completely depends on the honesty of whoever is running it and then we get surprised when some aren't, is the same mistake repeated maybe every cycle!

Self custody existed so you don't have to care about anything, but Coldcard events also fucked that up. Seriously, I mean it.

[Luzin]

Its not new for exchanges to shut down there are many exchanges are closed before now it does not make any specific  difference to Bitcoin and Crypto markets but this thing became anaxious for new traders specially for those traders who keep their money in exchanges rather then wallets and mostly new users make this mistake .

I’ve gone through Bittrex and Poloniex, back then they were exchanges with very high volume. Eventually, they couldn’t keep up and their user base kept decreasing. Bittrex even had to shut down its exchange. As for Poloniex, I left the market when they started having issues back then, there were even bankruptcy problems, issuance issues, and a huge hack worth over $100 million, along with many other problems. Then Bittrex faced a lawsuit from the SEC which caused them to run into a lot of trouble, so I eventually left Bittrex before it officially closed in 2023. Learning from these problems, actually we have the ability to anticipate unwanted issues like an exchange shutting down. So don’t let these problems scare us so much that they limit our activities related to Bitcoin investment.

[snowpega]

The surplus is good, but we don't have any way to recheck it publicly. It is just what Binance has claimed to have, but what I think is that if there is any dishonesty in this, then it should have been used against Binance by the competitors already. But if there is none, then that's why it is still around, and I also believe this way of assuming things is wrong.

Because building a system that completely depends on the honesty of whoever is running it and then we get surprised when some aren't, is the same mistake repeated maybe every cycle!

Self custody existed so you don't have to care about anything, but Coldcard events also fucked that up. Seriously, I mean it.

In the past, I was thinking about a thing which may be correct or not; I am not sure about it yet. I would like to ask you if you have any idea about this; do share it with me, hehe. Let's suppose a person holding their major funds in any Bitcoin address; this can be a self-custodial or exchange one. I know the more preferable option here is self-custodial, but I am supposing it here, right? So my question is: if that person is checking his address again and again on the blockchain at random or on a good website. Is it secure or not?

Like checking your address on the blockchain can reveal your address to the public, and at the same time you are revealing your IP address to the website's developers. And both things, if combined, can hint to a hacker to identify you a bit, maybe. This can open a gateway for a hacker to attack your personal wallet. This can be any kind of attack, e.g., a wrench attack. A single mistake can lead you toward bad consequences. What do you think about it? Share your opinion with me. Thanks!

[Faisal2202]

In the past, I was thinking about a thing which may be correct or not; I am not sure about it yet. I would like to ask you if you have any idea about this; do share it with me, hehe. Let's suppose a person holding their major funds in any Bitcoin address; this can be a self-custodial or exchange one. I know the more preferable option here is self-custodial, but I am supposing it here, right? So my question is: if that person is checking his address again and again on the blockchain at random or on a good website. Is it secure or not?

Like checking your address on the blockchain can reveal your address to the public, and at the same time you are revealing your IP address to the website's developers. And both things, if combined, can hint to a hacker to identify you a bit, maybe. This can open a gateway for a hacker to attack your personal wallet. This can be any kind of attack, e.g., a wrench attack. A single mistake can lead you toward bad consequences. What do you think about it? Share your opinion with me. Thanks!

It can only hint to a hacker if the site you are visiting (the explorer) belongs to the hackers, you can save yourself from this thought by using a VPN, your IP is secured and they can't see where you live. By the way brother I don't think you will be under any wrench attack like threat due to this, because you will be under one if the rate of such attacks is high in your region? If people see you like a golden egg laying hen, but if they don't know you lay eggs I know brother you just hold crypto (if hold any) we all hold some coins (sats BTW).

But to others it might be a big deal and they can see you golden egg laying hen, so better to stay under radar but still if they can know you have crypto and have a lot of them then they can eventually target you.

To learn more about how this goes, you can learn from the recent Karachi case I reported few days ago, a person moved to Karachi from Punjab, he made good profit from Binance's trading competition and he was also a influencer but I never heard about him before that news he moved there and some people picked him up at night and at around 2AM he was out chilling with friends and on his way to home they kidnapped him. The interview will tell you what they really know about him, in short they knew everything about him even what kind of tobacco he uses, they knew everything, how much devices you have, where you keep them, how much funds, and you must be thinking how he came to know that actually someone give his information to them who was in the same position, they simply offered a person before him to name someone and whatever they will steal from them will be yours on commission otherwise they will do worse to you so he gave someone's number as well in order to get out, he had to tell everything of course they were not newbie in this, they had sources, imagine you are at gun point and your life blinks at you, you tell everything brother, you don't hold onto anything. So he also had to give information of another YouTuber or influencer in order to get out, but he did not stay silent like others, he came to media, he warned that person and said I am going to flee this shit country now. That's it, those people by the way never got caught because they definitely belong to some authority or goons of a person working in powerful place.