Topic: Never store your coins in a CEX wallet - page 3. (Read 715 times)

Yup, I do agree, if you are planning for a long-term holding above 2 years or even above 1 year make sure to never choose any Centralized exchange wallet, it's better to hold funds on the decentralized open-source hot wallet if you don't have the cold storage or your portfolio size
doesn't require cold storage.

Just for the sake of information, Bybit announced today that they are disabling their services so this is what happens most of the time when you hold your funds over a long period due to regulatory issues platforms shut down their services. Even in some worst cases when exchanges get compromised your funds are gone forever like Wazirax Sacam in India..

If they are a centralized exchange, it's very slow chance that their wallets are open source. Binance acquired Trust wallet years ago and Trust wallet is close source.

Binance tried to say Trust wallet is open source many times, but you see it is truly close source.
https://walletscrutiny.com/?platform=allPlatforms&page=0&query-string=trust

Another review on Trust wallet.

Ive used non custodial wallet of binance but never sure or check whether its an open source or close one so Im still putting my asset on those reputable one like metamask for example.

Id also have funds on cex for the purpose of selling and p2p for my sake and some trading orders. This is true my biggest port was stored non custodial wallet for safe keeping.

I myself am still safe placing my funds in Binance until now even though as you said above that nothing is perfect and sometimes it is also stolen by thieves.

And regarding the announcement of theymos in 2022 as conveyed by @apogio it seems that the Unstoppable wallet is also easy and convenient to use.

If they freeze BTC withdrawls, i  can always convert to other crypto and pull out. It has happened before, even on binance. They didn't maliciously freeze a crypto, rather had some maintenance just when i needed that cash.
So i converted it to something else, and got it out. Even was in some minor profit due to conversion

As long it is sponsored by them with complete doubt it is still under their field.

For those who DCA, it is normal to hold initial purchase for that short time before sending out to decentralized wallet.

Assets on exchanges comes with different risk, personal attack and hackers going through the system to steal funds. No exchange is perfect to escape this attack but for that little time holding in exchange should be done on well known platforms not the minority on the list of exchanges.

Exchanges and exchanges owned web3 wallets as they say, it's never worthy to keep the coins there. If someone trades from time to time then there's no need to warn them because even if you tell them not to keep coins in there, they'll still do it because they have to.

What matters is not to keep the most of the portfolio that they have in it. The balance or amount that these traders need on the exchanges should be the amount that they only need for trading, nothing more, nothing less.

Well, and the same goes with the wallets that are owned by exchanges. I'm better using my hardware wallet instead.

This bad practice can happen with beginners and experienced people, because if they are careless, they will store their coins on centralized exchanges which have undeniable convenience.

They can understand about risk but their are other things to decide their decisions on where to store their coins.
Reminder: do not keep your money in online accounts

Electrum wallet is an open source, non custodial, that is good, but it is SPV wallet and does not require too much storage space on your device.

Best wallets for desktop and mobile.

some who still store their assets on the exchange are beginners, but those who have trading interests I am sure still store their assets on the exchange.
past events can give us valuable experience not to store assets on the exchange. beginners who come to invest or trade must also know such information. do not just trust exchange advertisements as a trusted platform.
exchange is not a platform for storing assets, even if you want to store them in a wallet, of course, we have to choose the right wallet. I use Electrum.

The reason is simple, for easy trades. Most of those who don't have intention of keeping their coins for long often prefers to store their coin in exchanges since they will need to trade it within a short time, and we can't really blame them reason being that there are times when you will want to move your coins from a self-custody wallet to an exchange, it will attract high gas fees or a congestion in mempool which will delay the transaction. Storing coins in exchanges is not advisable but if you don't have any plan of storing your coins for a long time then there may be need to just move it to an exchange for easier transaction whenever you are ready. 

Almost everyone already knows that even storing assets in the best decentralized wallet, but in reality many people still store assets on exchanges. There are two possibilities why many people still store cryptocurrencies on centralized exchanges, maybe they only have a few coins and the second may be because of the cost issue when sending to a decentralized wallet so they store cryptocurrencies on centralized exchanges. In addition, they store cryptocurrencies on well-known exchanges such as Binance Bitget and OKEx. But in fact, all centralized exchanges have high risks because all our assets are controlled by them and many exchanges have collapsed or gone bankrupt in the end many users have lost.

There are still many people who think this is normal, because the assets they have are small they ignore security, even though from the small assets we must learn to store them in a wallet that we can control ourselves. Likewise with the problem of costs, they should have the mindset that costs are not everything, the most important thing is that their assets must be safe. So indeed we should get used to storing assets in a wallet that allows you to have full control over your own coins rather than using a CEX wallet that is controlled by someone else and that is very risky.

About OKX, I think it's because both the OKX(exchange) and OKX(web3 wallet) could be accessed in a single application that's why you thought they were interconnected. But I would have expected you to spot the differences since you need to generate a seed phrase to create a wallet which is what the OKX(web3 wallet) requires and an email and password for OKX(exchange). If you'd backed up your seed phrase you would have been able to recover your funds when your import the seed phrase in the OKX app or any non custodial wallet.

For long time people in cryptocurrency world have known that it is best to keep your coins in special kind of wallet means in decentralized wallet. This is better than leaving them on centralized exchanges. Some big websites like Binance Bitget and OKX are now offering wallets that look like decentralized wallets. They even give you keys. But it is very important to remember that these wallets are still controlled by these websites and we do not have full control over your money. Electrum and Blue wallets let you have full control over your coins and they are safer than using wallet controlled anyone other like any CEX.

It is nice you brought up this topic and I believe it would also enlighten both the old and new members because it looks a bit confusing and people wouldn't understand what the CEX are up to. I have had this thought in the past and I had to do away with it because I will not for one day in my right sense make such a mistake of using a wallet from an exchange with them claiming it to be a self-custodial wallet which we all know is not true.

Any wallet which is issued by a CEX is nothing but a big trap to get at people. You might think it is a self custodial wallet but in the real sense,it is not what you think and I will not be surprise in the nearest future users of such wallet would start complaining of it being hacked and their funds stollen. Do not believe what they tell you about those wallets as long as they are in charge of if, their is no guarantee of the wallte safety. Be wise and avoid such wallet.

This is a good topic. Thank you for shedding light on the need to avoid CEX and their wallets when storing assets. Anyone who wants to use the Web3 wallet provided by these exchanges should create an account on the exchange to open a wallet and adhere to the wallet's terms of use. Indeed, they have control over whether the wallet is custodial or self-custodial.  

Anyone who prefers decentralization should completely avoid these wallets managed by CEXs, as they offer a middle ground solution, not a complete one. Using an open-source, non-custodial wallet is one of the safest and most feasible solutions.  

I don't know why any long-term investor would choose these exchanges and their wallets when many alternatives are available like hardware wallets and other non-custodial wallets. Is it due to a lack of experience, or what?

Sometimes people think that its easy for them to dispose their crypto stored on exchange when they want to sell it that's why they decide to use those platform to store their funds.

They ignore those risk presented to them and they are comfortable that the exchange is trusted also won't scam their user. This thinking is really wrong since we don't know on when those exchange remain to be trusted. That's the reason before those scary thing happened and got a problem with scamming. They better secure their funds on their hardware wallets so that they can make sure that their funds is safe and have full control of it.

If you have money to invest with crypto why not secure your funds, a hardware wallet is a must right now, because even though the exchange gives you a passphrase, you cannot call this at yours like you don't have the full utilization with your funds. In a hardware wallet at least you can say that you have your wallet that even offline you will feel secure not connected to the internet and have a safe funds and  keep your seed safe. Imagine the peace of mind it can give to you that you can store your funds without too much thinking being compromised or might be lost. Well, not unless you forgot the seed where you put it and got stolen your seed.

Hopefully this situation https://www.investopedia.com/news/largest-cryptocurrency-hacks-so-far-year/ will give a reminder for people not to store their coins on exchange.

Since they might lose their funds especially if the exchange cannot pay their depositor if they experience to lose a lot of money. There might be some people say that they are SAFU with big exchange like binance, but they would never know how long they remain like that. So secure their coins on the wallets they have full control and avoid using any third party platform then leave it there. Because as being said Not your Keys, Not your coin and people need to realize how important to acknowledge that word.

It's usually like that where majority of people will change their mind about cex when they experienced it themselves that's why no matter how much we remind them is that they don't even take it seriously. I can say that they do trust people who owns the cex since they are storing their coins on the exchange when we know that it isn't really safe to store coins on a platform that you don't have full control.

Maybe the CEXs has had enough of the criticism about not your keys, not your coins. And they have come out with a different approach something I would refer to as "semi-decentralized wallet" hehehe. The obvious is that, if it's not a decentralised noncustodial wallet then it is not, because there no difference in giving the owner of the CEX account a private keys while you the CEX still do have access to it too. What's private about that?