Topic: Treat exchanges the way you treat your casino accounts. (Read 276 times)

General is you should sweep all your asset on exchange whenever you are on trading for the day since there’s a chance that your funds might be caught off guard inside once they shut down like what happened to FTX customers.

But as a trader myself. I don’t frequently withdraw my funds out of exchange since I never deposit all my funds on exchange but rather just the money that I will use on trading(P2P and scalp trading) and the rest of my coin stored on my hardware wallet. Most of the transaction fee just cost an average of 1$ to 2$ except for ETH which is acceptable considering the safety of your assets.

Most people make this common mistake of keeping all their funds, even the ones that they wish to hold for a long term, in their exchange wallets thinking that they are secure. However, it's not just about the security of one's account but exchanges can face different problems that might cause one losing their assets or at least a part of it. One of the most common things that happen is cumulative wallet hacks where hackers hack into the databases of the exchanges and steal funds from many random wallets, yours can be one as well.

So, since we know non-custodial wallets exist, we shouldn't keep all our crypto in the exchanges if we are not using them regularly. Some people even withdraw their trading capital when they are done trading for a session and deposit again next time, that's not necessary because one will have to pay a lot of fees that way, but it should be done with assets that are kept idle in exchanges.

I fully agree with Zaguru12, exchanges should always be considered marketplaces. You should deposit the amount that you want to buy something, then move it to your own non-custodial wallet. This will be your personal bank. We have seen many exchanges go bankrupt, and users have lost funds. So if we can't take lessons from the past, then we have to be ready for a loss. Nowadays, hardware wallets aren't too costly, so the safest way to store your cryptocurrency is in your hardware wallet.

Despite the fact that this advice is always sung as a song on the forum, it's not everyone that will hear it, but there's a saying, "If we don't learn from others experiences, we will definitely learn from our own  experiences."The hack of FTX has been a lesson to learn in terms of keeping money on exchange. I was also keeping my coins on exchange, but after I learned that it was not a wise way of storing one's crypto asset, I had to divide them into a non-custodial wallet.

I've been facing issues with centralized exchanges and started using decentralized ones less. Recently, I came across a new project aiming to address this. They're building a hybrid exchange that claims to be Shariah-compliant, combining the efficiency of centralized exchanges with the security of decentralized ones. Despite being new, the team seems dedicated, working hard even on weekends. They already have a beta version with market and limit orders, and they're developing stop-limit functionality. To trade, you deposit assets into a smart contract, which adds to your trading balance. It's promising, and I'm hopeful it can provide a solution. Excited to see its success in the future!

This is a common advise that even new members that are just joining the forum will be aware of because of how it is been repeated in the forum in almost all the boards including local boards. Exchanges exit scam which can cause you to loss your money when you least expected it. Centralised exchanges have their role to play in the crypto market but exposing one’s privacy is just the disadvantage of using it and how they end up exiting scams. We are very careless as human but when it happens we do take caution for it not to happen again. Not your keys, not your coins should be the best advice that is currently being offered in the forum now.

Using a centralized exchange is different from leaving your coins on the centralized exchange. Privacy and security are two different things, when you use the centralized exchange, you don't have any privacy about yourself because with the mandatory use of KYC under the AML(anti-money laundering policy), you will be forced to submit your details to the centralized exchange before you can use any of their services and by that, everything you do and how you do is in their palm, they watch everything you do and you have zero privacy from them.

Leaving your coins on the centralized exchanges is practically zero on security, because "not your keys, not coin" and when anything happens like the company becoming illiquid or exiting, you will have yourself to blame because you don't have the private key to that coins and you will have nothing to withdraw in case of emergency like that and the centralized exchange can even seize your coins if they found you suspicious.


This is also individual, there are people that still leave their winnings on gambling platforms with the hope that 2FA and password will protect them from external hackers getting access to their money while some people withdraw their earnings that same day, some weekly and some prefer monthly just to understand the inflow and outflow of their money from casino. However, the best thing is when using any centralized platform and it involves money, don't ever leave it in their custody.

To bring solutions to banking systems and centralization that is why Bitcoin was created to give us financial freedom, but exchanged come to support the system in form of market to enable us get Bitcoin and other crypto easily through their services, but some of us start leaving our coin in their wallets because it is easy to hold in there, but the risk involved is very big and people need to consider the risk of leaving your coin in there since it is the same as banking system.

Tons of money was moved out of Binance exchange when CZ resigned, it happened so fast within 24hours and that shows that people are losing trust in centralized exchange, it's true that some still don't want to learn but what can we do about it? Nothing, somehow some people still believe that centralized exchanges is where their coins should be, as if the coins get lost they can put the blame on the exchange, they don't want to take responsibility for securing their own private key and this is insane.

I don't mind letting such people learn the hard way, if anyone is still keeping their coins on any exchanges right now they choose to do it even when they know the risks involved, FTX fraud was a good example, enough to make everyone turned away from centralized exchange but still yet many don't care, whatever happens to their coins is what they deserve, I don't pity such people.

The only people that should leave a small money on exchanges are daily traders, because they can't keep moving funds in and out every time, this will make them to burn a lot on transaction fee, I do trade on Binance exchange and when I make some money I always remove my initial, and use the rest to trade, since this is a free money I believe I can still live with whatever happens after, anything can happen to any platform at anytime, make sure you don't leave assets you aren't ready to lose on any exchange.

This topic has been brought up one too many times and your argument is valid so is the rest of the crypto users that keep coins on an exchange!

The primary reason for not keeping coins on an exchange is merely control based on the famous slogan around the forum, "not your keys, not your coins" and it's a good way to avoid losing coins should an exchange be hacked, windup or hit you with some terms and conditions to confiscate your coins etcetera...but some users will argue to say keeping coins on an exchange has its perks like avoiding paying transaction fees for back and forth transactions to the exchange, it's convenient for those in peer2peer business as the business can run 24/7 and I think for those that want to hodl coins for a long time are the best users to keep coins away from the exchange to protect their investments.

You are right, but for me, the reason for not leaving coins on a gambling account is based on risk management as greed can easily kick in when bankroll increases, so after making some profits I withdraw and leave what I need to use.

Sadly, what should be commonly known isn’t commonly practiced as people still fail to heed to sound advice until they get burned.
I think your analogy is quite flawed as some gamblers are also guilty of leaving considerable amounts on their preferred gambling accounts perhaps to be able to quickly place bets at short notice. Same issue with leaving your coins on exchanges, it’s commonly known but not always practiced.


People who had or still have their money saved under/inside their mattress have a pretty good idea on how important having self custody of their funds really is. We do have the opportunity presently to take custody of our funds but it seems people are not willing to be wholly responsible for safeguarding their own money.

As always we should be more aware about anything could possibly happen in a platform that's why its important for us not to make the exchange or casino as our wallet so that we will not get hack or scammed if unfortunate events happen to them. Much better if we want to store our balance we should grab a wallet that we hold our own keys so that we are not easy target for any hackings or anything bad that might happen to our wallets. We should always think about temporary things if we put some balance on our exchange account and make sure to withdraw our funds when we are already done for either trading our funds or gamble it on a casino. I know its hard to do some action nor discipline ourselves towards this action since sometimes we are lazy to do this basic things but once we experience the worst for sure we always think about securing and don't take those platform as safe place to hold our funds.

Of a truth there is no difference between a centralised banking system from the centralised exchange system. They both operate in similar ways holding their clients or customers funds where only them have access to it  and can do whatever they feel like because it is in their possession and they are backed by the government regulations which gives them head over your funds with them and before you do anything with your funds, you must first fulfill their protocols so as to access your funds which is not conducive in most cases.

In that case haven seen their actions and inactions, one should be able to know that casinos too have the same fate and as such should be treated the same way because non of them are self custodial and that does not guarantee the safety of your assets being in possession or custody of any of the above mentioned third parties.

The best thing one can do to guarantee their asset safety is to make sure their  assets are always under their custody.  If as a trader you want to trade,.you should only send the trade amount and if there be any profit, you withdraw it instantly after trading same applicable to the casinos as well. Do not retain your profit or assets in a third party exchanges or casino as your asset safety can not be guaranteed. Big names in the industry have suffered hack that alone should tell you that even the smaller names too are not safe. Take the safety of your assets very serious.

Yes you are right. We should always treat the cex as something not safe. Yes it has a lot of options and privileged but we must be limited to that considering the potential security of our asset. Its not bad to use cex in fact, many have love that however er should not forget the golden rule of not your keys not your coins since its a centralized entity. Always practice usage of non custodial wallets.

Exactly, that's why I sometimes panic a little when someone that I've meet who are into crypto tell me that they don't have any kind of non-custodial wallet and that they store their crypto in some exchange with Binance being the most famous exchange in my country and I don't want to be imposing on them by telling them that it's not a safe way to store their crypto so I just tell them that it's not recommended to do what they do but I don't force them or tell them that I don't do that, maybe I'll try to be more assertive next time about storing crypto safely.

 
I go with your idea that exchanges are to be treated in the same way we treat our casino accounts. it very clear that it will be very hard for gamblers to leave their money in casino accounts over long-term all because they know anything can happen because they are not in full control of their casino accounts, it is possible that casino company to crash anything and if possible the crash you will surely lose your money same applicable to exchanges if you leave you money in exchange know that you are not in full control of your funds and if anything goes wrong with exchange like get hack your funds is gone,so that is the reason why you are advised no to leave your funds in exchange for long period time because nobody knows what the future will tell and with all this difference things happening in cryptocurrency industry about exchanges that shows any exchange can collapse anytime.
 
If exchanges are to be used wisely by not leaving large amounts of money there for a long time, like moving funds to non-custodial wallets after used. I believe it will be a great help to anyone using exchanges for trading or doing something else. If anything happens to the exchange you are using, you will be among the victims whose funds will be lost.

Yes, I totally agree with you on this very statement of yours about treating our exchange accounts just like our gambling account whereby we only fund when time to use and not leave our entire savings in it, due to the fact that we do not own the private key which controls the funds on an exchange wallet and many other reasons. Because just for example, with the recent crash of a popular exchange known as FTX, which happened probably 1 & half years ago, resulting to several people losing their funds, and you kept your money there, you probably would have been a victim of it, which is why it's always good to keep holding our funds on a very secure non custodian wallet like Bluewallet or Electrum.

There's nothing wrong using centralized exchanges, so long you know when to get out your funds.
Should take note that after you complete your trading, as much as possible, transfer your fund to your own wallet.
Sometimes we can't avoid using the CEX services especially if we want a trustworthy platform to convert our crypto to our fiat.
This is why we can't totally avoid using their services. As long as you know how to take care of your funds with them.

But even if we how hard we try to remind everyone that they should only treat exchanges the way it is with what they offer and not a storage, there will still be people that will ignore that advice and will treat it as if it's an online/web wallet as it seems safe for them.
No one's gonna change their mind unless the exchange gets involved into a massive hacking or will suddenly file a chapter 11/ bankruptcy.

While it seems to be identical when you keep it on both centralized services. I even think that it's safer to put it in the bank than exchange. Because they're regulated by the government and there's an insurance that we deposit there. Well, that's just my comparison but of course I understand and know that banks can close our accounts all of a sudden as well and freeze our accounts.

Keeping funds on centralized exchanges comes with a big risk as you could lose it if anything goes wrong. CEX could be shutdown by the government, it could be hacked or it could go bankrupt. But these are not just the only issues to be worried of when dealing with centralized exchanges. Your data could be stolen and sold on the dark web. Morealso, the government could use the data to track and impose tax on their citizens. The safest way to store your funds is self custody.

The holding of the fund in different accounts often result in forgetting these accounts and their passwords. Also if we hold some coins in the account and that may be for the more time then there must be more risks for the users . May be that exchange got hacked and may be that coins would fallen greatly. All these things should be keep in mind only then the way we trade can be profitable. On the other hand the exchanges are I think for trade would be taken note of but not storing more funds in these different exchanges would be a wise thinking at all.

 Gamblers don’t usually trust online casinos, which is why they always withdraw their earnings immediately. Some people are leaving some in there for the purpose of playing additional games but not for the purpose of saving them in their The same ideas should be applied to centralized exchanges because leaving your coins in their custody is the same as gambling with your money because you can lose them anytime. Take CEXs as a market place where you will buy and sell your crypto coins, and move your coins out of the market when you are done trading them.

Whatever the service is, as long as their wallet is fully custodial, then you're not supposed to treat it as a storage. We've seen enough hacks, scams, funds management problems, etc. to know how fragile it is.

Best to go with non-custodial and non-hot wallet for storage 

It is obvious and the gambling example is just a waste here (in my opinion don't mind please) because if you would not have used it, the meaning would be crystal clear still. But hey maybe those who have not get the meaning of why people are saying not to hold coins on CEXs. TBH I am one of those who hold on CEXs but planning to move to non custodial wallet.

Actually I have to do p2p or sometime trading that's why I was keeping funds on CEXs otherwise I value your suggestion and we all should adopt it. Because if you don't own the keys then you don't own shit. Yeah I replaced the word coin with shit. hehe

Well, we should use CEXs for trading or relevant activity purposes, besides this holding is not one of the great uses we should chose CEXs for, and that has been proved in history so many times.

I highly agree with @OP, there is no difference in leaving our fund in a casino and leaving our fund in a centralized exchange.  Both are not created for stashing our coins.  They are created for a certain purposes, casino for gambling and exchanges for converting and trading our coins.  Any usage our side that services may put risk into our funds.  Since they are not use for stashing our cryptocurrency, if we leave our fund idle on their platform, there maybe a huge possibility of losing our funds, either by inside jobs or hacks.

Most people who are opposed to storing their funds in Centralized Exchange are talking about their investment funds which they are hodl, not about their trading fund which they use to speculate on the market. And most of the time investment funds that they hodls is in huge amount, much more than trading fund, which will be  extremely risky to be stored on a Centralized Exchange that can instantly without any reason freeze your account and just your money.

It is very common, it's the people who are not having the required knowledge that could lead to their realization of this, it's just as if you're having a package but doesn't know what's in the package for you, if you're using an exchange, you're the same as someone using a bank.


The bitcoin network is always available for the sake of those who wish to have their bitcoin on their non custodial wallet, noody is stopping others, but they were not aware of the

Holding your coins on a centralized exchange is an individual decision and hopefully, they already know what the risks are.
We always recommend not holding the coins for a long time because we don't know how long the exchange will be operational. Moreover, there have been several centralized exchanges that have ended up experiencing problems, making us have to be careful.
If we want to keep the coins for a while, that's fine. The important thing is that we always remember what we have to do and don't keep the coins for too long.
It's better if we move it to another wallet that we can control fully. And if you still want to keep those coins on a centralized exchange, only keep what you can afford. It would be the same as what we do in a casino, use the money we can afford.

I get where you come from but the main idea you present is not the best advice.  Many gamblers do not treat their Casino accounts properly or in a healthy way.  They often deposit more than what they are willing to risk and they end up losing it all.

If you are a gambler.  Do not treat Centralized Exchanges the same way you treat your Casino accounts.  Practice more self control and precaution instead.

It is common advice to treat an exchange account as a trading account and not a holding account. Holding crypto in an exchange account has a lot of benefits for example on Binance you get a good APR for holding USDT (my personal experience). Whereas holding your USDT in your personal wallet would not fetch you anything. Again they have airdrops that are quite lucrative wherein you get a good amount of new tokens that are supposed to be listed if you hold BNB. What I am telling you is that based on my personal experience that does not mean I am using the exchange wallet for holding all of my coins.

Having said that what will you get if you hold your cryptos in a Gambling platform? Nothing! Sadly that is the truth and you cannot force anyone to follow the rules.   We are here because we do not accept the rules and yet your advice can be considered unless you can provide a way to generate passive income with your crypto assets in your personal wallet. I feel if you have Bitcoin or Ethereum in your portfolio then regardless of the offers provided by any centralized exchange it is better to keep them in your personal wallet. 

Centralized exchanges have their sweet attraction that can not be denied by many cryptocurrency enthusiasts. They and you can use centralized exchanges, it's not like a dead pill that will kill us immediately when we touch and use it.

It's just we must be careful when using centralized exchanges and how we assign our money for our accounts on centralized exchanges. It should be a very small part of our money. If we lose it, we will be still good enough with rest money that is not stored on centralized exchanges.

Reminder: do not keep your money in online accounts
Secure your wallets
Security checklist
Not your keys, Not your coins

Though people has now started becoming weary of CEX after all the issues from it even before the last year FTX crisis and this year binance money charges from SEC, if all investors starts practicing this, it will minimises the amount lost by them if any exchanges being use suddenly crashed or hack.
And this include having more than one wallet at least two, your public wallet and private wallet, while transfering your coin non-KYC mixer before moving to your private wallet to avoid being trace from the  public wallet.

It’s a common advice to always treat your exchange just as a market place. Although we can’t get everyone to listen but I read a report that bitcoin supply on exchanges has reduce to around 5.4% in as much as we can’t be sure of the reports I think many people have basically taken self custody of their holdings probably because of the recent uprise of issues either regulatory or hack cases faced by exchanges most importantly top exchanges.

But aside the warning of storing coins on exchanges the other reason why some people warn against exchanges especially centralized exchanges that request KYC is the fact that one’s you get your coins from them even if the coins are move to self custody wallets there is still chance of your losing your privacy ones the government comes asking for it. So aside having full control of your funds, bitcoin also has given the opportunity of going anonymous.

It should be common knowledge by now that we're not supposed to leave our coins in an exchange, sadly it's not.

Some people feel we should ditch centralized exchanges altogether. I buy into that idea even though I've not fully stopped using them.

I don't quarrel with using centralized exchanges, my quarrel is with leaving your coins in them.

Those of us who gamble might get this better.
When dealing with your online casino accounts, you usually just fund them with the amount you want to use in gambling. It's usually funded from your bet accounts or wallet. You don't leave your winnings in that account. You withdraw them to your bank account or crypto wallet.

The same logic should be applied to your exchange account. Fund it with just the amount you want to trade or exchange. For traders, you can withdraw your profit into your wallet and leave only the amount you want to trade with.

We have an opportunity to have full control of our money. A system different from the traditional banking system, so what purpose is moving from the traditional banking system if you'll just end up keeping your money in a centralized exchange?