Not your keys not your coins for traders

[The Cryptovator]

I have also been using a couple of exchanges but not keeping much of the funds in the exchanges. Right now there are two exchanges using them for trading, but only for trading, not for holding funds there. After completing the trade, I move funds into my hardware wallet, either coins or stable coins, not keeping them on the exchange.

I think you are doing the right things; since you are doing leverage trading, then you have to keep your funds in the exchanges. So dividing them on multiple exchanges reduces the possible risk of losing funds in case of exchange exploitation. For spot traders, I will advise just moving funds into the safest hardware wallet after completing the trade.

[henmark]

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.

This is the reason I do not blame certain victims, who have their money in exchanges at the time of hack, some of them are trader who happens to be trading the market at the moment or waiting for a perfect opportunity to trade the market, not all of the victims were actually storing their money in exchanges.

I totally agree with splitting funds into separate exchanges, six maybe much depending on the size of the funds as well, but sharing KYC to six exchanges is definitely giving out much informations, sometimes users data are part of the stolen assets during exchange hacks.

There are a few users who rely on these exchanges with their long term holdings because these exchanges make it much easier to showcase PnL statements and also exiting from any specific long term position is quite easier on these exchanges. I was one of those who would prefer keeping most of the funds on exchanges just so I can catch any opportunity in the near future. I did not have any problem until FTX went down. That make me stand in a big loss and that was the point where I learnt not to completely trust these exchanges no matter how reputable they are.

I only use these exchanges to buy and sell but I will never hold on any exchanges. I would prefer keeping a cold storage and all funds would be moved over their right away. I don't even risk keeping funds on that exchange for more than 24 hours.

[Findingnemo]

I also have accounts on a few exchange but ultimately I am not using any at the moment, I use some p2p but once in a while and then just withdraw the funds after the trade completes.

SInce we started to have instant swap exchanges the need for traditional exchanges reduced a lot, I mean still there are traders who use them but people who simply wants to buy BTC and keep them in their wallet might prefer the instant swap exchanges.

[Finebone]

I think you are doing the right things; since you are doing leverage trading, then you have to keep your funds in the exchanges. So dividing them on multiple exchanges reduces the possible risk of losing funds in case of exchange exploitation. For spot traders, I will advise just moving funds into the safest hardware wallet after completing the trade.

The problem about leverage trading is that opportunity can come at anytime, so you need to have an active available balance all the time to seize any available opportunity, because if you do not have a margin available to take the opportunity that moment, it would be already late before you will finish wasting  time, by moving some funds to your exchange account. So it's very important that you must always have an amount you can afford to lose in your exchange account if you want to be a successful derivative or futures trader.

[BitBakerr1]

Most traders leave their coins on exchanges to wait for orders to be filled or wait for chances of opening new trading orders. It's not a good practice because of many risks you said, while there are also many reminders about centralized exchanges.

There is nothing without risk and trading is not an exception, that's why even though keeping our coins in a centralise exchange might not be a wise idea but it is necessary because opportunities to buy or sell could come up at anytime. So if we don't have our funds saved in a centralise exchange at the time the opportunity came, we might miss it. There is no doubts that Centralise exchange could be hack which is why any money we are leaving on it for trading should be an amount that we have ready our minds to lose since anything can happen.

I agree with you, If you are a trader, you need to always use an exchange, if you are not using an exchange, then you are not a good trader. A good trader must always use an exchange because anything can happen and you may decide to sell or buy immediately.
The reason why people are succeeding in trading is because they are using exchange, to be successful as a trader. You must use an exchange.

And yes, exchange can be hacked and Wallet can also be hacked, just this year we all saw some few wallets that have been hacked, Just the way exchange has also been hacked.

[Mpamaegbu]

Exchanges can't even prevent themselves from attacks, and this is the reason not to rely on them.

To tell you the truth, nothing/nobody is immuned from attacks in this industry. It doesn't matter how strong or fortified we think a particular exchange or app is. It happens whenever insiders want to rear their ugly heads and show their hands. When that Binance hack happened, I had some funds on the exchange (a couple of hundreds) and I didn't panic for two reasons. One, it was because what I had there at the time was an amount I wouldn't die for. Two, I had the confidence the exchange could refund everyone there because of its reserve funds in cold wallet. Even when the recent Bitget hack happened, I had two tokens there but I never panicked. In fact, I didn't bother checking my account until after a week of that hack. Everything was intact when I checked. The advice is to choose an exchange with high trust score rating if you must use one.

[SirLancelot]

I believe it is significant that there is a difference between. Trading funds and long term investors. When the trader waits for a long time for an off exchange spot price. The holding period can be significantly longer than the trader anticipates.An open spot order may keep the funds on the exchange a lot longer than the trader might think. This is not the same as saving coins in there. However it makes them susceptible to custodial risk. In my personal opinion. I would consider the change balance to be temporary working capital and would shift the money that isn't being used for active orders as often as I can to a wallet where I have the keys.

We can never trust exchanges for long term holdings. Not just the centralised exchanged but even decentralised exchanges are prone to risks like sudden hack, etc which can make us lose the entire holding in a go. With centralised exchanges, we at least have some surity about the funds being returned to our wallet but in decentralised exchanges, the funds once lost are lost forever because there is no intermediary to assure those funds. At one point, I would trust any of these reputable centralised exchange but will never go for the DEXs.

One should only hold the funds that might be required for trading on that exchange. Simply holding a long-term holding on that exchange makes no sense because we are taking unnecessary risk over there.

[Cryptmuster]

I also have accounts on a few exchange but ultimately I am not using any at the moment, I use some p2p but once in a while and then just withdraw the funds after the trade completes.

SInce we started to have instant swap exchanges the need for traditional exchanges reduced a lot, I mean still there are traders who use them but people who simply wants to buy BTC and keep them in their wallet might prefer the instant swap exchanges.

Using an exchange is not the best way to buy Bitcoin right now, there are many alternative services, like exchanges, that offer a more convenient experience. With these, you don’t have to worry about the platform demanding identity verification or blocking your account to investigate the source of the funds used to purchase your Bitcoin. While exchanges might be more convenient for active traders, those users must be prepared to complete a KYC, if they haven’t already, and be ready to provide documentation whenever the exchange requests it.

[Big Dirams]

I also have accounts on a few exchange but ultimately I am not using any at the moment, I use some p2p but once in a while and then just withdraw the funds after the trade completes.

SInce we started to have instant swap exchanges the need for traditional exchanges reduced a lot, I mean still there are traders who use them but people who simply wants to buy BTC and keep them in their wallet might prefer the instant swap exchanges.

Using an exchange is not the best way to buy Bitcoin right now, there are many alternative services, like exchanges, that offer a more convenient experience. With these, you don’t have to worry about the platform demanding identity verification or blocking your account to investigate the source of the funds used to purchase your Bitcoin. While exchanges might be more convenient for active traders, those users must be prepared to complete a KYC, if they haven’t already, and be ready to provide documentation whenever the exchange requests it.

I did had issue with my broker some months back, probably I guess it was early this year. Normally I have been trading for a long period of time now and I can guess it almost close to 2 years now and all this time I use Exness as my broker and I guess many of us are familiar with this broker so normally I use to fund my broker with fiat without no issue at all and some of this days I tried to fund my account through usdt because I didn’t wanted going for the p2p stress so I just made the deposit to my exness account.
After some little time I try to make withdrawal from my broker and they are asking me that I can’t withdraw though Fiat but only through cryptocurrency and I will have to withdraw to that same wallet that funded the account then bring it back again before withdrawal and that made me feel so bad and it was draining. After that day I didn’t use exness any more again, because they just wanted to be sure of the source of my income or either I moved the money from someone’s wallet. I know it’s security protocols but the stress.

Are other brokers too this way?

[Captain Corporate]

The actual fact is that as long as you are a trader, you cannot avoid keeping some stable coin in your exchange account, because if you decide to only make a transfer of usdt to your exchange account anytime you want to take a trade, you are going to miss a lot opportunities that would have demand quick action from you, so what I do is that, I usually keep some money in my exchange account, but I do not keep more than what I can afford to lose in it, because I need to have available margin always, so that I can take a trade anytime I want, once I spot a perfect trading set up.

Holding some stable coins in the exchange is understandable and usually not that risky. As long as the amount is not big, there should not be much of a problem in still using these exchanges for at least stable coin transactions. Storing more than 10% of our total portfolio on these exchanges might be a riskier move because if in case anything happens, you would suddenly be locked out of 10% funds which will definitely affect your other positions.

Even I use these exchanges for holding stable coins, mostly USDT because I prefer making some money out of P2P markets where instant buying and selling can make us catch a few bucks. But I would risk way less amount over there even if I can make fixed profits.

[ZAINmalik75]

I have also been using a couple of exchanges but not keeping much of the funds in the exchanges. Right now there are two exchanges using them for trading, but only for trading, not for holding funds there. After completing the trade, I move funds into my hardware wallet, either coins or stable coins, not keeping them on the exchange.

I think you are doing the right things; since you are doing leverage trading, then you have to keep your funds in the exchanges. So dividing them on multiple exchanges reduces the possible risk of losing funds in case of exchange exploitation. For spot traders, I will advise just moving funds into the safest hardware wallet after completing the trade.

I think sending coins back and forth after every trade can be too much of a hassle, especially for average traders; this should only be done if the trader uses hefty amounts for their trades which they know should not be kept in the exchange after they have completed their trades, and such traders can also afford to do it because they probably make good enough money from their trades to be able to withdraw their funds every day and then deposit them again each day to complete their trading activities.

However, when it comes to funds that a person plans to hold, they should definitely take them out of centralized exchanges and keep them in an external non-custodial wallet. You can't even suggest others to use hardware wallets anymore after the recent incidents with hardware wallet companies and manufacturers, but still, if there is a wallet and a company that you believe is safe, then you should use that to keep your investments funds because you obviously don't need to send them back and forth every single day like your trading funds.

[Peanutswar]

Well good idea too to make a deversification of your asset in multiple exchange because if one freeze or even get compromized still you have into other exchange, well seems its sometimes getting lazy to transfer back and fort your asset into your wallet to exchange so sometimes we let it there in the exchange itself. but still this is aint our money its their money once its on their exchange. Now it will become different story only if you will store your funds for a long term in an exchange with a longer position id recommend into using your wallet now than the exchange as your wallet.

[goldkingcoiner]

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.

I think that using leverage is basically the same as gambling, no matter how low you put it. Even at 2x it is a huge gamble. Especially in a volatile market such as cryptocurrency.

I have yet to hear of a single person, not an influencer or other type of liar, that they make a steady income from leveraging trades.

The real crypto traders all seem to be saying the same thing: Leveraging in crypto is gambling.

Also, not only are keys important, but your KYC is extremely valuable too. And can be used to ruin your life if it gets into the wrong hands. 

[L E G E N D A R Y]

Using an exchange is not the best way to buy Bitcoin right now, there are many alternative services, like exchanges, that offer a more convenient experience. With these, you don’t have to worry about the platform demanding identity verification or blocking your account to investigate the source of the funds used to purchase your Bitcoin. While exchanges might be more convenient for active traders, those users must be prepared to complete a KYC, if they haven’t already, and be ready to provide documentation whenever the exchange requests it.

Uhmm I’m kind confused here. You explicitly stated that Using an exchange to buy bitcoin isn’t the best option now, and that’s there are several other options, and the first option you mentioned that have a more convenient experience is still an exchange, so I’m not getting the point you’re trying to make here, so I was hoping you could enlighten me more on this.

I use Exchange for my purchases, and it’s not like I have a problem with KYC, but I sure would appreciate an alternative that’ll help avoid sharing my information.

[OcTradism]

Uhmm I’m kind confused here. You explicitly stated that Using an exchange to buy bitcoin isn’t the best option now, and that’s there are several other options, and the first option you mentioned that have a more convenient experience is still an exchange, so I’m not getting the point you’re trying to make here, so I was hoping you could enlighten me more on this.

I use Exchange for my purchases, and it’s not like I have a problem with KYC, but I sure would appreciate an alternative that’ll help avoid sharing my information.

Exchanges have centralized and decentralized, there are P2P marketplaces and these platforms can have policy with KYC or no-KYC. Privacy matters but not all people care about that so with them, where is available to buy bitcoin and cryptocurrency, it's enough. For security or privacy, many people don't actually care about that.

They can prioritize tier 1 centralized exchanges for best trading volume, best price, and likely best security for their fund as well as compensation in case of any hack.

Of course KYC is extremely dangerous and useless.

[Z_MBFM]

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.

There is no alternative to centralized exchanges for regular trading. You can trade through decentralized exchanges, but in this case your fees will be higher. Those who trade regularly always use centralized platforms. However, centralized platforms are not completely safe. Yesterday, a large exchange platform like Binance was hacked where hackers hacked $5.6B. Not only centralized platforms get hacked, hardware wallets, DEXs are also hacked, so the best strategy may be to keep funds in multiple platforms and trade there and you are already doing this. If your funds are very large, then it would be better to use multiple wallets for your personal wallet as well. In this way, even if any wallet or platform is hacked, unfortunately, you will not have to lose all your funds.

[L E G E N D A R Y]

Exchanges have centralized and decentralized, there are P2P marketplaces and these platforms can have policy with KYC or no-KYC. Privacy matters but not all people care about that so with them, where is available to buy bitcoin and cryptocurrency, it's enough. For security or privacy, many people don't actually care about that.

They can prioritize tier 1 centralized exchanges for best trading volume, best price, and likely best security for their fund as well as compensation in case of any hack.

Of course KYC is extremely dangerous and useless.

Okay that makes more sense now. Simply saying Exchange doesn’t do that much of explaining. Yeah I know about  DEXs but I don’t think I’ve come across any Decentralized Exchange that accepts fiat for Bitcoin. So please I’d really love it if you can give me some recommendations, because just like I said, even though I don’t really see KYC as much of big deal, I still wouldn’t mind having to avoid them in the future.

[Ayers]

Okay that makes more sense now. Simply saying Exchange doesn’t do that much of explaining. Yeah I know about  DEXs but I don’t think I’ve come across any Decentralized Exchange that accepts fiat for Bitcoin. So please I’d really love it if you can give me some recommendations, because just like I said, even though I don’t really see KYC as much of big deal, I still wouldn’t mind having to avoid them in the future.

If you are just after a p2p platform to buy and sell btc with fiat, not for spot or futures trading, there are a few options like Bisq, Hodl Hodl and Peach Bitcoin. All three support no KYC trades. Heads up tho, you'll sometimes end up paying above market because of fees and the sellers premium, and liquidity is usually thinner than on the big CEXs.

If you're looking to trade crypto on DEX without KYC, there are a few options for that too, like Hyperliquid, dYdX, and Aster.

[Just Say]

There are a few users who rely on these exchanges with their long term holdings because these exchanges make it much easier to showcase PnL statements and also exiting from any specific long term position is quite easier on these exchanges. I was one of those who would prefer keeping most of the funds on exchanges just so I can catch any opportunity in the near future. I did not have any problem until FTX went down. That make me stand in a big loss and that was the point where I learnt not to completely trust these exchanges no matter how reputable they are.

I only use these exchanges to buy and sell but I will never hold on any exchanges. I would prefer keeping a cold storage and all funds would be moved over their right away. I don't even risk keeping funds on that exchange for more than 24 hours.

Although exchanges make it easy to calculate profit and loss, one should not foolishly hold any holdings in these exchanges my idea maybe this matter is now known to everyone. It surprises us that one crypto wallet after another is being hacked because CEX are being hacked dramatically alongside hardware wallets.

At this point we can safely assume that keeping everyone's crypto holdings is the most challenging thing right now because hackers have become so sophisticated and adept that they are constantly stealing investors' crypto assets either from hardware wallets or from CEX (such as Bybit, Binance exchange). Therefore to be careful, everyone should try using these exchanges for spot trading and P2P but use cold storage for holding BTC, maybe this will keep Bitcoin holdings safe.

[L E G E N D A R Y]

If you are just after a p2p platform to buy and sell btc with fiat, not for spot or futures trading, there are a few options like Bisq, Hodl Hodl and Peach Bitcoin. All three support no KYC trades. Heads up tho, you'll sometimes end up paying above market because of fees and the sellers premium, and liquidity is usually thinner than on the big CEXs.

If you're looking to trade crypto on DEX without KYC, there are a few options for that too, like Hyperliquid, dYdX, and Aster.

Oh wow, that’s exceptionally helpful. I never know there were so many options for trading without KYC. I believe I’ve heard about some Decentralized exchanges, (even though I’ve not really tested them out yet), but Bisq, Hodl Hodl and Peach Bitcoin are completely new to me. The higher premiums and lower liquidity are worth considering too. I’ll definitely give them a try and then compare which is more convenient in terms of ease and reliability… thanks for the info.