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.

[Nalain420]

I would say exchanges should not be completely eliminated, but their functions should be limited. Exchanges can be used for trading or quick purchases, but non custodial wallets are much more reasonable for long term Bitcoin holding.

Not your keys, not your coins is not just a slogan, but in such a situation its real importance is understood.

Yeah true its not just a slagon it's a golden rule
"Not your keys, not your coins" . But in same post you said exchanges should not be completely eliminated because they are useful for trading
You are right here but why to compromise leaving capital on a centralized exchanges means we are ignoring the warning "not your keys"  it doesn't matter you move it to non-custodial wallet later by that time average retail trader is already been liquidified.  Just go on an exchange buy withdrawal it to your wallet and hold for long term. Like you said exchanges are useful for fast buying etc and for that big exchanges exist. If you wanna buy and withdraw it ro cold storage i think we should go for the obvious one at the end name of the exchange doesn't matter.

[Yablee0]

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

It has been said more than a thousand times that keeping our assets on an exchange is a very dangerous thing to do,  is not advisable, because most emergency don't gives signs before happening. Moreover, exchange is mostly for only our crypto transactions, afterwards every of our assets should be moved to our non custodial wallet for proper save guarding. Don't be mislead and become a potential victim.

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

Yes. That is just the right thing to do. Because it's more safe and secure then keeping our fund's on an exchange. Remember, that not your keys not your coin. This is not just for talking sake, but the actual fact as long as Bitcoin assets is concerned. Non custodial wallet is the way out take it or leave it.

[2Pizza410000BTC]

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 might have problem getting your bitcoin back depending on what's happening with the exchange
It also made me wonder if it is the current market condition that's making some of the exchanges struggle. When people are not really trading, making enough money to keep the business running can be hard

Am not saying it's the market condition that's making the exchanges shutdown, there could be other reasons too but for people that want to hold bitcoin for a long time it raises an important question

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?

There is no reason to worry about crypto exchanges closing down because when a crypto exchange closes down, the crypto exchange warns its customers and it is said that no crypto exchange has closed down till date without directly warning its customers. Apart from that, I am currently using Binance exchange which is the best exchange of the time and era. I believe this exchange will not close down and even if it does close down, it will definitely announce it to its customers a few months in advance. Moreover, I have used my own wallet to hold my Bitcoins because of which I do not worry and I never worry about the exchange closing down because there are still many exchanges where we can exchange our crypto.

[SquirrelJulietGarden]

There is no reason to worry about crypto exchanges closing down because when a crypto exchange closes down, the crypto exchange warns its customers and it is said that no crypto exchange has closed down till date without directly warning its customers.

You are sure about that, aren't you?

Many exchanges closed their services with many reasons and many people did not receive any announcement about service closure plans, were not able to withdraw their funds. If you use an exchange, that closed its service but made announcement about their wind down and gave you time to withdraw money, you were very lucky.

However, it's not reason to believe that you will be similarly lucky in the future.
It does not mean all other exchanges will play fair with customers.
Reminder: do not keep your money in online accounts.

Apart from that, I am currently using Binance exchange which is the best exchange of the time and era.

Poloniex used to be a big exchange, recent years it's a trash exchange.
Bittrex took over the leading position of Poloniex, but Bittrex already closed their service years ago.
BitMEX used to be a biggest perp trade exchange but it announced to close the service weeks ago.

Binance might be the next, you will never know.

[Brizi5000]

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 might have problem getting your bitcoin back depending on what's happening with the exchange
It also made me wonder if it is the current market condition that's making some of the exchanges struggle. When people are not really trading, making enough money to keep the business running can be hard

Am not saying it's the market condition that's making the exchanges shutdown, there could be other reasons too but for people that want to hold bitcoin for a long time it raises an important question

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?

There is no reason to worry about crypto exchanges closing down because when a crypto exchange closes down, the crypto exchange warns its customers and it is said that no crypto exchange has closed down till date without directly warning its customers. Apart from that, I am currently using Binance exchange which is the best exchange of the time and era. I believe this exchange will not close down and even if it does close down, it will definitely announce it to its customers a few months in advance. Moreover, I have used my own wallet to hold my Bitcoins because of which I do not worry and I never worry about the exchange closing down because there are still many exchanges where we can exchange our crypto.

This is just one of the risks associated with using an exchange to store your bitcoin, it doesn’t matter which one is the best, as far as it’s an exchange you can always expect anything to happen since you’re not fully the one controlling your money because you now have an intermediary who also have a say in how your asset is being managed or used. Apart from the risk of an exchange shutting down with or without prior notification there’s also the risk of loss of control, freezing of accounts, and restrictions from withdrawals most of the time it does happen without notice. Bitcoin main point is to provide users with privacy and self control of their money and that’s why a self custody is more safer than exchanges no matter how best  it’s been.

[Localhostspeed]

There is no reason to worry about crypto exchanges closing down because when a crypto exchange closes down, the crypto exchange warns its customers and it is said that no crypto exchange has closed down till date without directly warning its customers. Apart from that, I am currently using Binance exchange which is the best exchange of the time and era. I believe this exchange will not close down and even if it does close down, it will definitely announce it to its customers a few months in advance. Moreover, I have used my own wallet to hold my Bitcoins because of which I do not worry and I never worry about the exchange closing down because there are still many exchanges where we can exchange our crypto.

If you don't see a reason to be worry, I'm sorry there is a very big reason to be worry. If an exchange that is working suddenly feel they want to wine down operation and don't want to worn again, that means the exchanges must be suffering from one problem but left the public on the dark and if you have millions sitting on the exchange or on trade, you will be worry about how to recover your money, that will the first step that will comes to your mind.

You know one of the biggest challenges, if an exchange says they are closing down and are not going to be operational, they quickly stopped withdrawals and ask for additional verification. The same exchange that was functioning very well without any concerns is now asking for another thing. You know that will caused panic and fear to people that they may want to run away with people's funds, some might not get their money with such step.

[5W-KILO]

Many more crypto exchanges will shut down in the future, and if you can look into things you will see that many crypto exchanges have shut down also in the past and here we are, Bitcoin is still very much alive.

It's none of your concern if crypto exchanges are collapsing, moreover Bitcoin should be exchanged in a peer to peer manner, centralised exchanges aren't really helping but I blame the higher numbers of crypto users who don't understand.

Maybe they happen to prefer the easier way to transactions which is what crypto exchanges are offering but it's not the way that things should be done, private data loss is not posing a great danger because of KYC verification and information that users dropped on CExs.

[Ryu_Ar1]

Many more crypto exchanges will shut down in the future, and if you can look into things you will see that many crypto exchanges have shut down also in the past and here we are, Bitcoin is still very much alive.

Everything will change and when there is a dead Exchange in the end there is always a new exchange that may even be big at one time so in this case I think it becomes a reason but on the one hand this should not be used as a concern for bitcoin holders because the Exchange does not become a benchmark for bitcoin holders even if there are many or few exchanges in the future it will not affect.

Bitcoin is not a stock that when the stock exchange goes bankrupt, the stock will have problems because basically bitcoin holders sometimes prefer to keep their assets in the wallet they like (cold or hard wallet) instead of on the exchange so that indirectly this does not become a benchmark for holders to worry even if the exchange in the future lives a little.

[Just Say]

This is just one of the risks associated with using an exchange to store your bitcoin, it doesn’t matter which one is the best, as far as it’s an exchange you can always expect anything to happen since you’re not fully the one controlling your money because you now have an intermediary who also have a say in how your asset is being managed or used. Apart from the risk of an exchange shutting down with or without prior notification there’s also the risk of loss of control, freezing of accounts, and restrictions from withdrawals most of the time it does happen without notice. Bitcoin main point is to provide users with privacy and self control of their money and that’s why a self custody is more safer than exchanges no matter how best  it’s been.

There are many cases of centralized exchanges closing users' accounts for unknown reasons, which gives them the opportunity to confiscate crypto owners' assets, as evidenced by the fact that Bitmart exchanges have warned users and they are making various excuses to prevent customers from withdrawing crypto assets.

The bottom line is that there is a difference between Bitcoin in your non-custodial wallet and Bitcoin stored on an exchange. So no matter how best the exchanges are, self custody is more secure for storing bitcoins as I have noticed that Blink wallet has been hacked into dozens of custodial accounts, in fact Blink wallet offers both custodial and non-custodial services.

https://x.com/blinkbtc/status/2101342192820178983

[YOSHIE]

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?

Yss, you are right that recently many crypto exchanges have closed, as you said, as far as I know BitMEX, BitMart and CoinEx, not because of hacking, went bankrupt, on the contrary they closed based on tightening regulations from the local government, so in my opinion there is no need to panic.

The point is that human worry still exists, considering things like the BitMEX, BitMart and CoinEx exchanges which are having problems, maybe temporarily store Bitcoin assets, just store them in a hardware wallet, Ledger or Trezor, so that there will be no more worries.

Therapy, even though there are crypto exchanges that are closed, there are also crypto exchanges that have received official permission from the government, maybe you can use them for a while.

[jossiel]

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

Yes. That is just the right thing to do. Because it's more safe and secure then keeping our fund's on an exchange. Remember, that not your keys not your coin. This is not just for talking sake, but the actual fact as long as Bitcoin assets is concerned. Non custodial wallet is the way out take it or leave it.

If we are not going to use the exchange, that makes no sense of keeping our money in them.

So, choose to keep it to ourselves with non custodial wallets. It helps us avoid the risk of having our funds involved in a potential hack.

We become our own bank and despite that we've been hearing that, others should start to realize the beauty of it.