Topic: Recent events should make you withdraw all your coins to your own wallet: Part 2 - page 5. (Read 1475 times)

These centralized crypto lending websites are different from exchanges, many members who say big exchanges are safe use them for trading, p2p activities and make the mistake of not only revealing their identity to the third party service, but leaving their funds in the exchange which is a very dangerous thing to do, because many things can happen that will make them lose their money, but they do not leave their money there because of they want interest on it, they leave it there because some of them are lazy and do not have understanding of crypto risk, so they want convenience that come at an expense.

But centralized crypto lending websites are different, and they are the platforms i referred to in my earlier post, now here is why i mentioned 'greed' and 'impatience', the investors that take their money from their wallets and deposit it into lending platforms, are doing it so it can generate interest for them and no other thing else, Celsius promised over 20% interest, BlockFI, Gemini Trust, also promise to pay huge returns, so i call the investors who deposit to this platforms greedy and impatient because they are lured by these interest rates, that they forget what their money is going to be used for, and how risky it is. If you take a look at how much these platforms claim to have, then you will understand that investors are depositing huge sums of money into these lending websites, and only caring about the promise of good interest (greed).

By giving your crypto to the use of exchanges, all their advantages are lost. After all, the point is to single-handedly own crypto like a personal bank. Whoever has access to this is the owner. By storing crypto in exchanges, users can't be called owners or masters in any way.

Big or small exchanges, it doesn't matter. The only important thing is that your crypto with them and exchanges will always find a reason or excuse under which they can take away your savings. Events like these show that you need to keep your crypto out of exchanges and not use it unless absolutely necessary. It is foolish to expect exchanges to fulfill their obligations when they can ignore their fulfillment.

I'm not so sure. We often see users on this forum say that big exchanges are safe, they have insurance, they can't possibly go bankrupt, and so on. Events like this just go to show that none of that is true.

Getting pennies on the dollar for what little assets they manage to recover will be little consolation.

And yet the outcome here is the same. The users deposited their coins with a third party, and are now being denied access to those coins.

Which is very easy to do, and the whole point of this thread: Withdraw your coins to your own wallet. Then, just wait.

It is especially important and relevant with centralized lending platforms. The bear market, the collapse of Terra, Lido Finance, 3 Arrows Capital show that (but it is not strange, we all know about it) liquidations are terrible and not exclude any entity, individual or institutional.

Any entity / participant in the market over leverage will be liquidated by the market. People can think (naively) that institutional investors, venture capitals are too big to be liquidated and collapsed. They are wrong because even amongst institutional investors, there are competitions and they will kill each other at right time. It is like natural selection amongst wild animals in nature.

In bear market, it is time to survive. The first priority for everyone. Sun will shine after the bear market ends but only if you can avoid liquidations and lose your capital in bearish period.

That is a different issue and not related to "not your keys, not your coins." The issue here is that investors are ignoring, or perhaps not understanding, the risks of of their investments. Every investment has some risk, even one that is believed to be safe.

This what I actually do.

Exchanges should only be seen and be used as an exchange. I really avoid using these exchanges other features like staking, saving, earning, there's also some games on those exchanges etc. that will only risk my funds on this platforms.

things to note.

there are some people that use custodial services/exchanges as a wallet and leave funds in there for months/years without looking at the funds long term. treating the wallet as a retirement investment to hoard long term

many exchanges/wallets have terms which say if the exchange/wallet deems there is a service breach they can stop use of certain services/functions and offer a redemption/refund.. but with a clause that this option is only open for 90days after service suspension. and if there is no contact or no instruction to withdraw in those 90 days. then the customer forfeits their value entirely.

so again dont treat custodial services as a long term wallet that you can just leave funds in and forget about for many months. you might find out the funds have been taken from you.

a prime example would be this:
in early 2017 ($2k/btc) someone has 0.5btc and not required KYC because value was ~under $1k
however by late 2017 it became $10k($20k/btc). where the exchange demands KYC due to value increase triggering KYC limit requirement. but the customer has not opened their account due to wanting to hoard and not touch it until retirement.
exchange treats it as a breach for not providing KYC, and no communication from customer to get KYC, so suspends customers access to certain functions/services. and by spring 2018(90days later).. the coins are forfeited.

this would all be seen by the customer as morally wrong and thought of as theft.. but under business terms of the main big brand exchanges business terms of service. deemed as acceptable and deemed as the customer agreeing to that theft due to agreeing to the terms of service.

the small print of one example

https://www.coinbase.com/legal/user_agreement/united_states#general-obligations-taxes-designating-a-fiduciary-and-termination
6.9. Suspension, Termination, and Cancellation.
Coinbase may suspend, restrict, or terminate your access to any or all of the Coinbase Services, and/or deactivate or cancel your Coinbase Account(s), with [/u]immediate effect[/u] for any reason at its sole discretion and is under no obligation to disclose the details of its decision to take such action with you. You acknowledge that Coinbase's decision to take certain actions, including limiting access to, suspending, or closing your account for any reason in our sole discretion, may be based on confidential criteria that are essential to Coinbase's risk management and security protocols. You agree that Coinbase is under no obligation to disclose the details of its risk management and security procedures to you.

You will be permitted to transfer Supported Digital Assets or funds associated with your hosted Digital Asset Wallet(s) and/or your USD Wallet(s) for ninety (90) days after Account deactivation or cancellation

though under regulations a exchange cant freeze an account and refuse refund/withdrawal, without a court order.
however be very wary of the exchanges own business service/membership policy about how it interacts with its customers about the services it offers and how customer should use them services in their service policy(not the regulatory policy).

they CAN stop function of certain features and tools and services. as thats the businesses own decision/discretion to make about who and how users can use its services(as with any business) but if this is the case where the 'freeze/ban' is not due to a court order due to some criminal investigation. but instead just a breach of service.. the service should offer an exit method as part of their policy to ban users.

if an exchanges service policy states that they as a business decide to keep funds locked up for a breach of business service(unrelated to criminal investigation via regulatory policy) then NEVER use that thieving exchange.. because that is theft

yes its morally wrong and criminal for the business to have such business terms in its policy to just withhold funds unrelated to any criminal investigation court order. but customers/victims can only really make that argument by trying to sue the exchange. which the business will counter argue that the customer agreed to let the business keep the funds after a breach when they signed up(agreeing to the terms).. or counter argue by saying the agreement included a clause where customers agreed to go to arbitration and not ever sue the company(emphasis: please avoid businesses with these clauses)

in short. read the terms. dont keep funds in businesses longer then needed to make a a swap/trade and accept the risks that they could steal your funds thinking that your value is not worth it to fight in court over

Most likely, due to rapidly falling crypto prices, the value of collateral backing the various loans they have made has fallen below the repayment amounts for the various loans, and any amounts available to cushion against loan losses have been exhausted.

I think it is very unlikely that Celsius' customers will not see any of their coin again. It is more likely they will face losses, and will experience delays in being able to withdraw the amounts available to customers.

Ultimately, in a free market, it is up to the market to decide if the compensation (interest) is worth the risks associated with keeping coin on a platform such as Celsius. I think time will tell if their customers will end up as a net beneficiary to keeping their coins at Celsius.

As you note, the TOS clearly stated that coin deposited would be used to fund loans.

this is actually uncalled for because it a breach against our trust and believe on them to be able to secure our private lives without a compromise but they failed, instead they take an advantage on users, i pity alot of users who where still in dark about using centralized exchanges because they aren't aware of the risk thereof but those that quite alright knows what's at stake and still remain with centralized exchanges shouldn't be considered for pity whenever they encounter a strike from one of the demerits in CEX.


just for the sake of those trading that can't do without using centralized exchange I've said it all over that any amount that should be there must not exceed what they can afford loosing, while decentralized exchanges are best for investments, am not against going under maintenance but we should consider it the longevity or time taken in doing so, anything the exceed one or two hours going under maintenance should be suspected for some reasons beyond ordinary eyes can see because we are dealing with customer/users of over millions in numbers and you can't expect to have them risk their live investment on a feeble site that does not worth it at all.


because many failed to realise the coins remain being not their own 100% not until the possess the keys to it.

Well for those who do not know, i guess this is what they used peoples' money to do, and it went wrong:

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It is funny how people take away their bitcoins from their personal wallets and put it in a centralized crypto lending website all because of promises of a certain percentage of interest, when they can just keep their coins in their personal wallets and make ROI in the long term; many of them know the risks involved, the terms of service, and what the platforms are using their money to do, but they are lured by the promises of up to 20% interest, so greed/impatience, and not lack of information is the major problem affecting customers of these platforms.

well researched. factual. no drama. no fantasy.

good advice. well earned 50 merit.

people should only use exchanges the very day they want to buy/sell. and then get the funds out same day. dont rely on central services as a custodian wallet mid-long term.

Part 1 is here: https://bitcointalksearch.org/topic/recent-events-should-make-everyone-withdraw-all-their-coins-to-their-own-wallets-5387401. In that thread I spoke about how centralized exchanges and services were freezing the accounts of their users and seizing their coins, often indiscriminately and because of completely external reasons that the users themselves had no control over. If, for some crazy reason, you still have coins on a centralized platform, then the recent events with Celsius really should be the last wake up call that you need.

If you are unaware, Celsius Network is insolvent. About a week ago Celsius completely froze all accounts, all transfers, all trading, and all withdrawals: https://nitter.net/CelsiusNetwork/status/1536169010877739009. The next day it is reported that they have hired restructuring advisors: https://archive.ph/riZJu. Celsius have 1.7 million customers, all of whom are currently unable to access any of the coins they deposited to Celsius, and indeed, are unlikely to ever see them again. Lured by the ridiculous promises of 20% returns, users completely ignored the fact that their Terms of Use explicitly stated that their coins would be lent out and used to make highly risky investments, and if something went wrong they have absolutely zero protection, despite this being repeatedly pointed out. Well, something has gone wrong, and now these users have lost everything.

So, given that these centralized platforms are gambling your money and go bankrupt at any time, why are your coins not in your own wallet yet? In particular, I'm thinking about the millions of people using BlockFi. If you look at the first two underlined links above, you'll notice that BlockFi's terms are almost identical to those of Celsius. BlockFi are losing large amounts of both Bitcoin and Ethereum from their central wallets as users try to withdraw their coins while they still can. They've just announced they are cutting 20% of their staff. They just been fined $100 million by the SEC. They refused to deny giving users' money to Three Arrows Capital, which has also just collapsed in to insolvency: https://nitter.net/BlockFi/status/1537137936549957632

BlockFi will be the next to collapse, but it certainly won't be the last. Get your coins out of every centralized exchange and platform in existence and in to your own wallet now, before it is too late.