should we hesitate if exchange have huge reserve?

blue Snow

legendary

Activity: 1526

Merit: 1032

Up to 300% + 200 FS deposit bonuses

Quote from: Apocollapse on September 27, 2024, 01:29:55 AM

Definitely most people don't care with hack or something bad happen as long as it can be fixed ASAP, but if they were leave their coins in Mt.Gox, it will teach them a good lesson.

Some people never took the lessons what happen on another exchange before. Many reason they told me to still keep their asset on exchange i.e. (want save the fee, and don't want to wait too long for busy network). Keep the asset on the exchange making them quickly to sell their assets if the coins pump or can easy to cut lose if coins dump. So with this situation, i'm not surprised if the trader as one of the most victims if the exchange was hacked. The investor or long-term holder is still save because they always keep their asset on non-custody or hardware wallet.

Quote from: Fiatless on September 27, 2024, 03:37:49 AM

Crypto exchanges cannot easily be monitored. They can easily move their reserves or exceed the limits of the financial operation.

But in my country, all crypto exchanges must report their financial and asset for each month to the Financial Services Authority. If they are not reported, their license as exchange will be revoked and they are not permitted to operate in Indonesia. That's why I asked, to make sure I have to right decision to still keep my bitcoin on exchange until next year.

justdimin

hero member

Activity: 3122

Merit: 672

www.Crypto.Games: Multiple coins, multiple games

Quote from: Pandorak on September 27, 2024, 10:32:23 AM

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.

Doubts must remain, Indodax can still operate after they are hacked because they still have a larger number of assets, but what if what was hacked was all the assets? can they refund the user's balance?

Honestly, i'm an Indodax user, but after the platform returned to normal, i immediately took the assets i had there & moved them to a non-custodial wallet. I will not use that platform again.

There has been a lot of hacking in a lot of places, stake got hacked, primedice got hacked, binance even got hacked, and still continued without much interruption. Obviously there were also many places in crypto were they got hacked and then bankrupted and closed. We called most of them "exit scam" because they just say they got hacked and closed, but we do not know if they just took our money and left or they actually got hacked.

So all in all if a place can survive and continue, then you will know about it, they will continue, some will be like mt.gox and just get ruined, some will be like binance where they continue without a trouble because they will have a huge huge cold storage where even if all the hot wallet got hacked, cold will be enough to continue.

Zaguru12

hero member

Activity: 812

Merit: 927

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

Proof of reserve is still the dumbest thing to fall for and safe your coins on an exchange, this funds are most at times not true they are simply just figures that centralized exchanges have been using of rent to lure more customers, example is the binanace SAFU which I still don’t trust. This funds can also be hacked even if they are true, so to me the best of storage still remains personal storage.

Take a look at Mt.Gotx even though there is funds to be distributed do you see all members getting their funds back? That’s another thing to be worry about imagine when you need your funds and the hacked exchange even if they have extra coins on their reserve gives a date which doesn’t align with your time of need isn’t that affecting your freedom of money. So there are many reasons to avoid this kind centralized exchanges.

Z-tight

hero member

Activity: 994

Merit: 1089

There is no reason why you should store your funds in an exchange. Even if an exchange displays their reserves, do you know what the liabilities are, and how are you sure that what they have will cover liabilities.

Centralized exchanges also engage in fractional reserve, so most of their customers funds are used in the pursuit of returns for the exchange, if any of those investments fail or if there is a 'bank run', then the exchange will surely file for bankruptcy and customers will have to wait for years in the hope of getting something back.

Trêvoid

brand new

Activity: 0

Merit: 0

Even with Indodax recovering quickly and showing proof of large reserves, it's always wise to be cautious. Exchanges can be vulnerable to hacks, no matter how large their reserves are. While they may be able to cover losses but i suggest you is, keeping your Bitcoin on a hardware wallet (like your Ledger Nano S Plus) is a safer option for long-term storage.

Pandorak

full member

Activity: 196

Merit: 200

A Full Member who wants to become a ₿ maxi

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.

Doubts must remain, Indodax can still operate after they are hacked because they still have a larger number of assets, but what if what was hacked was all the assets? can they refund the user's balance?

Honestly, i'm an Indodax user, but after the platform returned to normal, i immediately took the assets i had there & moved them to a non-custodial wallet. I will not use that platform again.

ImThour

copper member

Activity: 1442

Merit: 1522

Bitcoin Bottom was at $15.4k

You should hesitate if your funds are in any exchange, no matter if its a local exchange or Binance with a reserve of billions. Not your keys, not your coins. Some people will never understand this until they lose their funds or get locked out and will have to talk to a robot to get their account access back. It's a pain which I do not want anyone to experience, so just send your funds to a hardware wallet.

kryptqnick

legendary

Activity: 3234

Merit: 1399

Join the world-leading crypto sportsbook NOW!

It's wonderful when exchanges manage to bounce back fast, and when losses are taken by the organization and users are not experiencing fund reductions. I remember a similar story with Binance a few years ago, when they compensated everyone after a major hack, so everyone was happy and saw it as a reliable place to keep their money. After all, if you keep funds in self-custody, and you somehow get hacked, nobody will reimburse you.
That's a benefit people can consider, but also value it against privacy violations (if an exchange imposes KYC), risks of an exit scam, inconveniences of having your funds frozen, etc.
To me, self-custody is still a better choice. But I believe people are free to choose for themselves, and there are decent arguments for custodial highly reputable services.

DooMAD

legendary

Activity: 3724

Merit: 3063

Leave no FUD unchallenged

It's all a question of how you perceive "value". If you only care about the fiat value of your funds, then sure, reserves are fine. If, however, you care more about the value in terms of utility provided by Bitcoin, that value cannot be replaced if the exchange is hacked and loses all their BTC. But then, if you cared about the utility value, you probably wouldn't be storing your coins in an exchange in the first place. People who keep their funds in exchanges are like a different breed. I don't understand them and they definitely don't care about the same things I do.

fuguebtc

hero member

Activity: 1904

Merit: 535

Leading Crypto Sports Betting & Casino Platform

I remember before FTX collapsed, they claimed that they had $10 billion in reserves and the naive people who believed what they said were the ones who suffered the most after FTX declared bankruptcy.

Even if Indodax provides proof that they have $750 million, what guarantee is there that if they get hacked again or go bankrupt, they will use that reserve to compensate you or their users? One thing you need to keep in mind is that centralized exchanges only give proof and claim that they have large reserves but they never promise or make agreement with users that they will fully compensate if they have any problem. Also, let's not forget why we abandon banks and trust Bitcoin, while exchanges and banks are centralized institutions.

ABCbits

legendary

Activity: 2870

Merit: 7490

Crypto Swap Exchange

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

Yes. Aside from not owning private key to your Bitcoin, there are other common disadvantage such as
1. Unable to sign message. This could be helpful when you accidentally send to wrong address and the receiver looking for proof that you're the sender.
2. Higher withdraw fee. Exchange generally charge withdraw fee higher than TX fee, since it's one of their income source.
3. Lack of privacy. Exchange usually only generate deposit one address, which makes you use that address for all kinds of usage.

fikrett

jr. member

Activity: 70

Merit: 1

Quote from: SilverCryptoBullet on September 27, 2024, 06:57:16 AM

Quote from: Apocollapse on September 27, 2024, 01:29:55 AM

Binance has $93 Billion, but I'm hesitate to leave my coins on Binance because centralized exchange isn't a place to leave your funds.

Advice is don't store your bitcoin in custodial wallets, on online platforms, on centralized exchanges.

Events made you scare about custodial wallets, centralized exchanges. I agree with you, but these events are not enough to make many people fear about custodial wallets, centralized exchanges; and they continue to store bitcoin on these places.

Yep, for now, convenience and sometimes not enough knowledge outplays the common sense and the potential risks.
Interesting to see how the situation will change in the years to come.

Kemarit

legendary

Activity: 3080

Merit: 1353

I don't we have this philosophy not to leave huge amount of crypto specially Bitcoin in any exchange?

That has been our adage for many years and I doubt that even if an exchange has a lot of reserves and funds are supposedly SAFU, we should be keeping our coins with them.

The FTX collapse should be fresh in our mind, and even if Indodax came back as normal after the hacked, it doesn't mean that we should trust the again.

SilverCryptoBullet

member

Activity: 97

Merit: 43

Quote from: Apocollapse on September 27, 2024, 01:29:55 AM

Binance has $93 Billion, but I'm hesitate to leave my coins on Binance because centralized exchange isn't a place to leave your funds.

Advice is don't store your bitcoin in custodial wallets, on online platforms, on centralized exchanges.

Events made you scare about custodial wallets, centralized exchanges. I agree with you, but these events are not enough to make many people fear about custodial wallets, centralized exchanges; and they continue to store bitcoin on these places.

Synchronice

hero member

Activity: 882

Merit: 792

Watch Bitcoin Documentary - https://t.ly/v0Nim

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.

Stake also got hacked and lost coins worth 20 million dollars but no customer had faced any problems. It's good that you didn't experience any problem but leaving funds on an exchange isn't about whether exchange will give pay you back your money after hack or not. It's about the fact that when you don't have access to keys, you do not actually own your coins.
Just think about it, you transfer your house on your neighbor who you trust and lets you to live in the house. In this case, this house is yours but it's on another person's name and that person can sell or rent your house because it's not on your name anymore. Do you understand the difference now? Not your keys = Not your coins.

Even if your exchange doesn't experience any hack, keep in mind that they can block your account and seize your assets at any time, without explaining a single reason to you.

Text

hero member

Activity: 2464

Merit: 594

Bitcoin Casino Est. 2013

Even with large reserves, it's important to remember that keeping your assets on an exchange still carries inherent risks. Large reserves are helpful, but they aren't a guarantee against future security breaches. Exchanges remain attractive targets for hackers due to the sheer volume of funds they handle. They may cover losses in the short term but the long-term reputation, trustworthiness, and security of the exchange are still critical factors.

NewRanger

sr. member

Activity: 1582

Merit: 333

I am sure the owner is also a BTC hodler, if the loss figure is estimated as you said the exchange owner can immediately replace it easily whether he sells part of his BTC ownership to compensate his customer funds or uses the profit from the annual profit he earned.

For the enthusiasm and significant increase after the incident I think this is normal, maybe the owner also pumped up the performance of his exchange by buying daily alongside other users. What is certain is that Indodax is not FTx.

bitLeap

sr. member

Activity: 1204

Merit: 486

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.

I have long left the local exchange you mean, not because I doubt or do not believe our assets are there but because the costs incurred are very different from other local exchanges that are also regulated by the government. In terms of effectiveness when trading, there are still many complaints that are still a topic of discussion among users of the exchange. Imagine when you trade either Bitcoin or other coins when experiencing a significant increase, suddenly the exchange does maintenance automatically, it is very uncomfortable to use. Not only once they do maintenance but every time there is a price increase in the market. I emphasize every time maintenance, and if the exchange you mean is as I mentioned earlier, it does not mean that we do not care about what happens, but some of us are no longer trading there. Although it has been confirmed that bitcoin and other assets when theft occurs are 100% safe, the level of user trust becomes alert and avoids such exchanges.

avikz

legendary

Activity: 3080

Merit: 1500

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.

Exchanges with huge reserve can surely be considered safer amongst others! Because even if they are hacked, at least you will get back your money after a short delay. But I am still very hesitant to keep my Bitcoins in any centralized exchanges. The good old rule - not your keys, not your Bitcoin - applies to all situation regardless of the fact that an exchange has a huge reserve. But yes, it easier for that exchange to recover from such hacking disasters faster than its peers. That's the only difference here. Prefer not to keep your coins with any exchange. Or you can also limit your amount to be kept. never keep all of your holdings with an exchange.

Fiatless

hero member

Activity: 574

Merit: 554

Leading Crypto Sports Betting & Casino Platform

Quote from: blue Snow on September 27, 2024, 01:07:19 AM

A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.

When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.

Why would you choose a risky path when you have a better option? The reason why people keep money in fiat banks is because the national deposit insurance ensures it. The Central Bank monitors them closely and can always verify that their assets can cover their liabilities. Crypto exchanges cannot easily be monitored. They can easily move their reserves or exceed the limits of the financial operation.

Sometimes these exchanges claim to have funds they don't have. There are speculations that some centralised exchanges borrow money from each other to show the public that they are healthy. How can you verify that they own the reserve funds? That exchange might not have survived if the hacker had taken more than 20 Million USD. It is also possible that they borrowed funds to balance the book.

Topic: should we hesitate if exchange have huge reserve? (Read 202 times)