Not your keys not your coins for traders

[Oshosondy]

I have registered on many exchanges just because I am a trader. Among the many were some centralized no KYC and KYC. Presently I am using 6 different exchanges which I divided my coins among. While trading I use just 3 exchanges actively for grid trading. Grid trading helped me divided my coins on different exchanges in case one exchange is exploited, get it is a trading strategy similar to averaging or a form of averaging.

Some of the exchanges that I am using have been hacked before, but luckily I always do not have money on the exchange at the time of the hack. Example is Bitget, I was having just $1 on the exchange while having money on four other exchanges at the time of the hack.

I also use leverage for my advantage. Example is if I have $1050 for trading, I send $350 to 3 exchanges. Instead of using 1x leverage, I use 3x leverage. I can use as low as 0.2x leverage, depending on the coin pair that I am trading.

These are the ways I have reduced the probability of losing too much money on exchanges. I want to see your own opinions of what you are doing to reduce the chance of losing too much money on exchanges during hack.

[OsaiEmma]

I don't trade grid, I trade futures and sometimes spot; so...I really don't like diversifying the trading platform I use. Most Centralized exchanges do have a safe mechanism for hacks because that's something that can happen at any time. Most recent cases of hacks on CEXs saw those CEXs refunding some parts or all of their users' funds. Because of this, I'm not that bothered or paranoid about hacks while trading—that'll add another layer of stress to trading itself.

But, isn't this setup of your's stressful and tedious? Juggling different accounts amongst different CEXs isn't something I can handle, honestly. If I get to a point where I feel unsafe keeping my funds in a particular CEX or CEXs in general, I'll simply quit trading.

[Oshosondy]

I don't trade grid, I trade futures and sometimes spot; so...I really don't like diversifying the trading platform I use.

Grid trading is just a trading strategy, you can use it for both spot and future trading or use it for any of them. It is not a among the types of trading.

Most Centralized exchanges do have a safe mechanism for hacks because that's something that can happen at any time. Most recent cases of hacks on CEXs saw those CEXs refunding some parts or all of their users' funds. Because of this, I'm not that bothered or paranoid about hacks while trading—that'll add another layer of stress to trading itself.

Anything can happen, it is best to prepare for any worst scenario.

But, isn't this setup of your's stressful and tedious? Juggling different accounts amongst different CEXs isn't something I can handle, honestly. If I get to a point where I feel unsafe keeping my funds in a particular CEX or CEXs in general, I'll simply quit trading.

Device that people are using also is important. If I open many exchanges, none is closing underneath. The device I am using gives me a smooth experience while visiting the exchanges and other apps.

[Dr.Bitcoin_Strange]

I also have account in more than 4 exchange because I was usually searching for the one with best low fee but I realized that the difference is not even so significant unless for someone that is trading with a huge capital and I don't mean $1k below, although I am not trading with up to such amount but I do not like to leave money in different exchange when I am not trading with the money on that exchange at that moment. If for example I wish to trade on exchange A, that's where I will deposit my funds and if I also wants to use exchange B, I will have to move my capital over there, having money on different exchange all at once like you said, that's a different kind of risk for me. If I won't be trading for some time, I don't like to leave my capital on the exchange but only when I am ready to trade is when I make the deposit.

[ObeyKnock]

I want to see your own opinions of what you are doing to reduce the chance of losing too much money on exchanges during hack.

Major exchanges allow you to limit the functionality of the API to trading, without the option of making withdrawals, and/or only allow transactions from specific IPs. This is an important setting for bots.

If for some reason an attacker gets hold of the API or takes control of your VPS , he won't be able to move money to another wallet. Such incidents, like key leakage or VPS hacking, happen more often than exchange hacking, so it makes sense to insure against these events.

For those who only use bots (say, grid bots), this setting is more important than the choice and diversification of exchanges. An intruder will be able to trade with available pairs at best.

[masulum]

For those who only use bots (say, grid bots), this setting is more important than the choice and diversification of exchanges. An intruder will be able to trade with available pairs at best.

That’s if your own bot server is hacked, and if there is no withdrawal option on API, then your money will be safe, but not for your position if there is and option to buy and sell. the worst case is, if the exchange system being hacked, that will be a different, because the hacker already have a control over the exchange system, not just the API function.take a look for the hacking incident from several exchange, including the latest case, Bitget^[1] hack. that incident had absolutely nothing to do with the API, but it happens because of hacker success to bypassing Bitget authorization system.

[1]: https://finance.yahoo.com/markets/crypto/articles/bitget-hack-timeline-own-system-164015015.html?guccounter=1

[ObeyKnock]

the worst case is, if the exchange system being hacked, that will be a different, because the hacker already have a control over the exchange system, not just the API function.

API scoping is different from withdrawal address whitelisting, which is where you're allowed to add a new address but can't withdraw to it right away. Most major crypto exchanges have this, and should.

Then in Jan 2022 there was a hack at Crypto.com which involved a 2FA bypass, and afterwards they implemented a 24h delay with notification to the user for new withdrawal addresses.

In general, if someone has full control of your account, whitelisting won't stop them from draining it. But if you're paying attention and can quickly freeze the account upon receiving an alert, then whitelisting can stop them from getting your funds. That's what matters.

More on the Crypto.com hack and the 24-hour withdrawal whitelist fix: https://www.theverge.com/2022/1/20/22892958/crypto-com-exchange-hack-bitcoin-ethereum-security

[Frankolala]

I use three exchanges for my trading activities and I don't like keeping what I cannot afford to lose in them which means that I cannot have funds in all the three exchanges that I'm using since, I don't trade often only when I understand the market. What I do is to transfer funds to my exchange account whenever, I want to trade.

I prefer to split my trading funds into two and keep them in two different exchanges while, the third exchange will not be funded. It's better to use more than one exchange for your trading activities. I was lucky not to have funded my bitget account before the hack news because I was too reluctant to trade that day.

[Pandu Geddon]

I do not have preventive measures like the ones you implement. I only actively trade on two centralized exchanges, and I rarely split my capital across the exchanges I use, because I tend to use only one exchange when trading.
Since I also do not trade very often, I rarely leave capital on the exchange. But in certain situations, I also leave it there just to open the next position. I don't know if many traders also implement preventive measures like you do, and how effective that actually is.

[Nathrixxx]

Bitget's experience is another recent hack that should teach us a lesson for those who are used to using a centralized exchange for trading: don't keep all your trading funds on an exchange; the risk may be too high for you to be on their side with all your trading capital because you can't predict what may happen in the near future with any centralized exchange. Not your keys, not your coins still remain ever relevant.

[Zoomic]

While your idea of not keeping all your trading funds in one exchange is probably a good idea as we've witnessed different exchange hacks in the past, I you at not talking about the disadvantages of using too many exchanges.

Having multiple accounts means having multiple passwords, withdrawal addresses and sometimes it can lead to making mistake.

Instead of copying this your strategy, I'll rather use few exchanges with huge reputations and fund them with the amount I actually need for trading.

[joniboini]

I have registered on many exchanges just because I am a trader. Among the many were some centralized no KYC and KYC.

So some of them haven't asked for your ID data yet? That sounds too good to be true, considering how many exchanges are closing down because they can't follow MICA and whatnot. Even then, I can't imagine juggling between different accounts with multiple KYC checks just to lower the risk of being blindsided when a hack happened. I'd rather do the conservative way of picking one or two that has the best liquidity and manage my risk accordingly.

I think using API might help with reducing the need to login on multiple websites. I certainly have good experience using API, although it can be abused easily if the platform is careless with how they handle them. I certainly don't want to use an exchange that allows withdrawal via API, especially with no limit or additional verification.

[Pandorak]

Personally, i also use several exchanges, but only for trading, to make more money, not as a place to store Bitcoin or other assets. I use some of the top exchanges currently available, although there’s no guarantee they won’t be hacked.

As is currently being widely discussed, there’s the case of one of the major exchanges with a fairly good reputation Bitget. The hack that occurred certainly caused users to worry, even though they were ultimately able to withdraw their funds, they’ll likely be hesitant to use that exchange again.

As for the strategy you’re using to minimize the risk of significant losses, that’s a good approach. While there are pros and cons, the most important thing is that we’re comfortable with the choices we make.

[yhiaali3]

This is much better...
distributing assets across multiple centralized or decentralized exchanges is the best way to reduce risk in anticipation of any unforeseen incidents such as the Bitget hack a few days ago.

I also use this method in general....
I use Binance and Bitgate and a third exchange It was CoinEX, which I used from time to time, but unfortunately it recently shut down.
Luckily, I didn't have any assets on Bitget when it was hacked because I use Binance most of the time.

[Oshosondy]

I have registered on many exchanges just because I am a trader. Among the many were some centralized no KYC and KYC.

So some of them haven't asked for your ID data yet?

I said both KYC and no KYC exchanges. Definitely I passed ID verification on few of the exchanges.

That sounds too good to be true, considering how many exchanges are closing down because they can't follow MICA and whatnot. Even then, I can't imagine juggling between different accounts with multiple KYC checks just to lower the risk of being blindsided when a hack happened. I'd rather do the conservative way of picking one or two that has the best liquidity and manage my risk accordingly.

I think I know how to choose exchanges. Among the ones that closed recently, I used BitMart and BitMez in the past and I had bad experience with both exchanges. I even posted my experience on BitMart on a topic on this forum.

To BitMart. Bad perpetual trading experience. I am leaving.

I think using API might help with reducing the need to login on multiple websites. I certainly have good experience using API, although it can be abused easily if the platform is careless with how they handle them. I certainly don't want to use an exchange that allows withdrawal via API, especially with no limit or additional verification.

I may not login for weeks or months unless I log out or using a new device to access the exchanges.

[Proty]

Having funds in different exchanges can reduce or minimise the risk of losing all your funds if one of the exchanges happens to be compromised, but it will be best not to be storing ones funds in an exchange. As for me , I would only keep an amount that I will use for trading in an exchange while assets that is for long term should will be on a noncustodial wallets. There is also extra risk that comes with the use of leverage hence there is need to be careful even if the assets is in different exchanges.

[OsaiEmma]

I don't trade grid, I trade futures and sometimes spot; so...I really don't like diversifying the trading platform I use.

Grid trading is just a trading strategy, you can use it for both spot and future trading or use it for any of them. It is not a among the types of trading.

Oh! That's true. I use to see grid trading bot in CEXs, but I haven't paid much attention to it since it's a sort of automated trading. Thanks for the clarification.

But, isn't this setup of your's stressful and tedious? Juggling different accounts amongst different CEXs isn't something I can handle, honestly. If I get to a point where I feel unsafe keeping my funds in a particular CEX or CEXs in general, I'll simply quit trading.

Device that people are using also is important. If I open many exchanges, none is closing underneath. The device I am using gives me a smooth experience while visiting the exchanges and other apps.

Well, you're right, your device can affect your overall experience, but I still feel like it will be stressful for my kind of setup since I have to manually analyze each chart, open positions, setup SL and TP, and closely monitor price movements. Unless if I automate some of the process, I won't be able to keep up.

[Alphakilo]

Any trader using up to 6 exchange for just trading activities must be a very active trader from all indication and have a strong operational discipline, because it would be more work to look after all of them and decide on which is better than the others to use at a certain time.
To have a strong setup as this with multi exchange distribution must have come from a place of experience but there's nothing really safe about relying on centralized exchanges due to systemic risks, no matter how safe you play it.

I do only prefer to fund my trading accounts when I intend to trade and besides this, I leave my funds in a self custody wallet despite how safe at the moment an exchange might be and while using low leverage may be a smart move to manage exchange risk, I never forsake using self custody storage for long term profits alongside strict API permissions, which stands to ensure my setup is even more resilient.

[Byebyebtc]

I have registered on many exchanges just because I am a trader. Among the many were some centralized no KYC and KYC. Presently I am using 6 different exchanges which I divided my coins among. While trading I use just 3 exchanges actively for grid trading. Grid trading helped me divided my coins on different exchanges in case one exchange is exploited,

I have actually not experienced any loss of money because as a result of exchanges, and how do they exploit someone?
I do care about my funds, but I actually do trust my exchange even if they misbehave sometimes I don't really noticed everyone because I'm putting lots of focus on becoming profitable and I don't really pay much of attention in the Aspect of exchanges and loss of money, probably because I haven't experienced ine my self.
But I will like to know what ways exchanges can exploit someone, let me know what level of attention I should put one my exchange.

[Odohu]

When I say the caption, I was thinking you have discovered a no KYC platform that one can actively trade on the same environment like trading in CEX. But it seems the post is mostly about spreading the risk and not put everything in one exchange. Such idea is great considering the level of hacks that is happening to exchanges and other centralized platforms. It is very necessary to take precaution to avoid losing everything upon one incidence.