Topic: Coins on an exchange, any exchange, are never safe (Read 418 times)

Once it's centralized nothing is safe but we can't stop using it, if you make profit from trading how will you profit if you don't use centralized exchange. Once invested means we take risks, so no matter how many exchanges fail, I believe we will never eliminate our reliance on them.

It always happens again and again. Sometimes the loss is covered, sometimes it's not but most exchanges have their problems from time to time. You don't want to leave your money and ultimately your future in the hands of some random dude even if it's the "mighty" CZ.

People will never learn because there's more crypto users every year and those newcomers will once again repeat the same mistakes.

You can check my post from a year ago where I said that the biggest risk of trading is the fact that you have to hold money on an exchange.
https://bitcointalksearch.org/topic/m.57451823

A year later and one of the biggest exchanges implodes.

That's something I actually didn't know. I guess having funds on Binance is safe-ish? However, quite a few members will disagree with that statement. Honestly, exchanges are much more versatile and user-friendly; Binance offers a mobile app and even a debit card. It's generally a great option, not only for beginners but also for experienced users.

I'm using Binance's savings and staking services, and while I'm planning to move to a decentralized platform, I find the whole concept of being able to trade crypto and invest it at the same time quite convenient.

Its been said for thousands or million times for sure that leaving coins on an exchange is never been safe but surprisingly which there are people whom do really leave out their funds on an exchange.

Some do even make it as their main wallet without even thinking up about the risks specially on these hacking incidents or other exchange issues that could possibly happen.There's no such thing about

100% safe when it comes to custodial platforms or things which we know that there's no way on recovering your funds once they do experience some problems.
I know its hassle to make out active deposit and withdrawals on exchanges but as able as you could then it would be always that recommendable.

I said it the other day, but eventually this won't happen. Since, opening a centralised exchange in the first place will be considered a shady act, since there's no reason why peer to peer can become the mainstream trading route. There's the issue of escrow, and making it simple enough for people to use, and unfortunately I don't think multisig is the answer there due to the complexity that it adds to the transaction.

Ultimately, the only reason we tolerate, and don't learn our lessons about centralised exchanges is that they're by large very convenient due to the simplicity. It's one of the biggest questions you get asked by people who don't know about Bitcoin. "But, how easy is it to buy something with Bitcoin", which of course what they're actually asking is how easy is it to exchange, and turn into real (from their perspective) money. Centralised exchanges make it incredibly easy to do that within a few minutes.

However, peer to peer exchanges don't have that simplicity or speed. Unless, you've found a trusted seller, but even then you're likely ignoring certain security recommendations during the process. That's where we should be looking to develop, making peer to peer exchanges more convenient, and simple to use.

The only issue I see with peer to peer exchanges is governments not liking the idea of them, due to the fact that people could potentially money launder easily. Since, centralised exchanges will be reporting their books to the authorities, whereas peer to peer isn't doing that, it's down to each user to do that. Which of course, they/you should be doing, but the government will definitely see issue in the potential for people to cheat the system or go undetected more easily there.

People never learn because they think that after it has happened, it never happens again or it doesn't repeat itself. They refuse to learn from people's experience. No matter how reputable an exchange seems, like they can never go bankrupt or be victims of hack, people who have not learnt this lesson should learn it never to keep their coins in an exchange when there are cold storages and safer places for them.

binance has their SAFU in place. so if anything happens, you have your insurance. don't know if FTX has that kind of feature. but in any case, we should not really store our funds in CEXs. however, if you are staking or availing the savings feature, i am more confident to use binance services. but in this market, we really don't know what will happen next, even top crypto-exchange like FTX can go bankrupt without a warning.

Yep, there will be always news of a bankrupt exchange, it is ideally a warning for everyone to keep their coins in private wallets (not in the exchange wallets). However, not every individual who has crypto coins really understands and realizes the risks. Some of them may be beginners, others may be lazy to move their coins to private wallets because of the transfer fees. And some people may think that even if there is a problem with the exchange, as long as it is a trusted exchange like Binance, they will refund the customers' assets. These people will always consider putting their coins in exchange wallets, so the news of bankrupt exchanges won't work on them.

I believe it isn't bad to use crypto exchanges if we are to trade, or even leave coins that are intended for trading. Leaving coin in an exchange will be an issue if we use it to keep our cryptocurrency because we never know what will happen in that exchange in the future.  I had a bad experienced regarding leaving coins in an exchange for a long time.  Since I trusted the exchange, it never occurs in my mind that the exchange would declare bankruptcy, they send notice to users but I failed to read it on time.  The time I read it, the allotted time for withdrawal request of funds I already expires.  My fault on not getting my self updated and my fault of keeping my crypto in exchanges, if only I kept it on my wallet, no matter how long that crypto is untouched, I will always have access to it.

Well, we tend to believe or hope that it won't happen to us. In my opinion, we use exchanges out of comfort. They are relatively simple to set up and provide you with a wide range of capabilities.Exchanges such as Binance or CEX.io go as far as having investment plans, staking functions, and saving functions. On the one hand, I feel relatively safe on Binance; however, everyone is guilty until proven innocent. You never know what might happen to the exchange, but even if Binance went bankrupt, which is unlikely, it would have a huge impact on cryptocurrencies.

From what I've understood, can someone be absolutely safe? I'm storing bitcoin on my computer through Electrum; how safe am I? How can you store cryptocurrencies when using DeFi projects and being involved in staking? Metamask doesn't look too safe to me.

Crypto exchanges are created to exchange and trade our coins from one coin to another.  It is not meant to be our personal wallet.  So anyone using it as a personal wallet is in for a possible rekt when the cryptocurrency exchange is hacked, turned scam, or got bankrupt.  So let us remind ourselves and the people around us to no treat exchanges as personal cryptocurrency keepers.  Send only coins that are meant to be traded and leave only coins that are on order and make sure to turn on notification so that once the order is fulfilled, we can immediately withdraw the cryptocurrency to our own wallets.

Human nature.  It's often either greed or laziness. 

Lazy people think it's too much effort to manage their own keys and keep secure backups, so they place trust in total strangers on the internet to do it instead.  It strikes me as madness, but people like that definitely exist.  As a very rough generalisation (I know it doesn't apply to everyone), people seem to prefer convenience over security.

And greed causes people to come to terms with the realisation that, while you're holding your own keys, it's more difficult to gamble by day-trading altcoins and other tokens.  It's easier to again trust total strangers on the internet.  Supposedly a risk worth taking because the potential for profit is too tempting to resist. 

I used to do it with small amounts, but I don't anymore.  I never had coins on Gox, but I was right here when it collapsed and witnessed the fallout first hand.  That event definitely instilled some caution into my mind.  Not sure why it didn't have the same effect on others.

Well you need a few coins on exchanges if you do business with quite a few companies that only take coins for payments.

If you DCA long term you need an exchange to buy the coin.

say you have 5000 usd on coinbase and it is for doing a 200 a  week dca buy of bitcoin.

you can pull the btc off every 5 buys and self custardy it.

So your risk of losing funds is greatly reduced.

Plus the usd cash on coinbase is insured by the fed government if you are USA based.

I haven't been following crypto exchange news lately, but I agree with the op that there's always a risk there. Less reputable exchanges can have bad security and get robbed or perform an exit scam. More reputable exchanges might still face issues due to mismanagement of funds or a security breach. On top of that, there are increasingly new and new KYC requirements for those who want to use crypto exchanges. Meanwhile, it's quite easy to just install Electrum wallet, generate a seed, create a password if a person wants an extra albeit probably unnecessary layer of protection and be the sole owner of one's coins, no KYC or anything else required.

Previously, I was a fan of holding my coins on exchange platforms, but frankly, after I saw a lot of platforms that were hacked and declared bankruptcy, I decided to hold my coins in cold wallets like Ledger Nano X. I see that my coins will be much safer than holding them on exchange platforms because cold wallets are not connected to the Internet And no hacker can access them other than hot wallets and exchange wallets if you like to save your coins on an exchange, choose Binance, but you should not keep all your wealth on it.

Yes, this option can be good sometimes but not always, because in addition to the time and fees as you mentioned there is also another problem because sometimes you have an open deal and the price of the coin is down so you can't close the deal and lose your money so you have to wait a few days for it to go up The price of the coin and you can sell and close the deal, so I find it difficult to withdraw your money to a safe wallet on a daily basis at the end of every day.

Or you can also at the end of the day after completing all the trades, you withdraw all to your non-custodial wallet. This will take time and a bit of fees but it is obviously safer to leave funds on centralized exchanges. We cannot stop using CEX, unless DEXs provide us with similar services.

I agree with  OP opinion about exchange market is not safety place for saving coins assets, however trusted with exchange market and have good reputation we can't expected about how long they can be trust when saving assets at some exchange market. Looking on cases happened with FTX exchange market after get problem with Binance exchange, have issues with withdrawing paused and not process yet.

I don't believe with exchange to hold coins for several years later, better save and hold coin in hot wallet like metamask, trustwallet or used hardware wallet if want secure hold coins.

I think MT. Gox time didn't teach lots of people so much sense or perhaps they forgot so early that it happened 8 years ago but the situation is not different with SBF and FTX, Sam was an Id!ot for using customer's money for strategic partnerships but even at that, there were so many red flags that beg so many unanswered questions like where they were getting all those millions from, not that the fees are enough to generate such revenues for those purchases and partnerships but people were all quiet and didn't withdraw their assets.

Bitboy was ranting the other day shouting at SBF for lobbying the top US office but so many people were using that as common discussion and laughing instead of being concerned, now that the did have been done, they have to learn the hard ways not to leave their Bitcoins on exchanges, the movement has always been not your keys, not your coins. I hope this mistake is the last one we would have in the crypto industry because it's killing the hope of investors.

There are several possibilities why people are more comfortable to store funds on exchanges than in my personal wallet in my opinion, the main reason makes it easy to make transactions while experiencing an increase.
And I think wherever we save funds we will never safe , if we are not careful. Crimes will definitely exist and the partnership in us is also not avoided