User protection funds, Should more cex adopt this culture?

Bushdark

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Quote from: shawonngp on December 08, 2023, 09:44:45 AM

Quote from: Wapfika on December 06, 2023, 12:42:25 PM

Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

Apparently, the funds are self-funded and designed to safeguard users' assets against hacks, harsh market conditions, etc. In my opinion, this is a commendable practice by the CEX and will undoubtedly instill confidence in users when using the platform in the future.

Perhaps other platforms should adopt this culture moving forward?

Although this is just another shill by Bitget to highlight one of their feature but I guess already have one of this feature and in fact started this even before Bitget. I’m not sure if other exchange done this but Bitget is not the one who started it so stop sharing like Bitget started it.

Besides I’m not sure if that funds is really secured if they are still the one holding it and not in the care of an escrow which will act once the condition met because this protection funds can be voided anytime once the CEX itself already taken the fall.

I did not heard before saw this op about Bitget exchange protection funds for their users safety. Definitely it's a good initiative to build users trust, As far as i know Binance is the first exchange they implement SAFU worth of 1 billion dollars, Then several good exchanges started it.

This method of ensuring user's fund safety is what should be enforced by the government to force many cex exchanges to adopt so that there won't be continuous complain of crashing exchange or exchanges getting hacked without a way for users to get their funds back.
There are things the government need to do to make sure that centralized exchanges relax funds to users after getting bankrupt or crashing to enable users to get their funds if not full but part of their funds back.

OcTradism

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Quote from: justdimin on December 10, 2023, 01:25:54 AM

nswer of the CEX to the famous phrase: "Not your keys not your coins", that is always being reminded to all of the crypto users. I think CEX are already annoyed with that because they think they are mainly the ones who being are targeted for that. But other than that, it is a must do, also because of the reason that you have said earlier or to the hacking, scamming, and the sueing of the regulators.

For it to be more effective or to give us more assurance, maybe the exchange should prepare a kind of legal document that we will be signed. I think it's also possible that the key to the lock funds will be hold by multiple trusted people. That should lessen the chance for a single people to ran away with it.

They can give reports on Proof of Reserves to their exchange users. With more regulations, centralized exchanges will be regulated more strictly and they will have to be more transparent with their business treasury and how they manage funds of customers.

With more laws, more guides from governments, regulators, I believe Audits companies will join this cryptocurrency market and they will accept to make audits for centralized exchanges. We will have those audits reports in future that I hope will help to reduce risk of shady managements on customers money.

With reports or with audits, it's always in my mind "Not your keys, not your bitcoins".

Reminder: do not keep your money in online accounts

justdimin

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Quote from: Kelward on December 07, 2023, 05:26:53 AM

Quote from: livingfree on December 06, 2023, 04:38:27 PM

Is Binance's SAFU the same with this protection fund of Bitget? Yes, it could just be a shill to make it look good but here's my tea on this one.

It's not going to change the fact that CEX remains as a CEX even with these features. As long as they're not providing its customers the custody to own over the coins they deposit, whether there are insurances or protection funds, nothing will change that fact.

It might be a good feature but do you think that it's good to rely on it because they have that sort of protection? The best protection is you alone to hold that key of your funds.

User protection fund is good, it at least gives their customers some assurance that their funs is secured, no matter what happens. Assurances like this are necessitated by the fact that people are loosing confidence in exchanges, even the well established ones, due to obvious observations that have been happening lately.

Truth remains that even with these features, as you've observed, as long as their customers do not have control over their coins in the exchanges, then there's no full assurance, in the case of the exchange shutting down.

This is the answer of the CEX to the famous phrase: "Not your keys not your coins", that is always being reminded to all of the crypto users. I think CEX are already annoyed with that because they think they are mainly the ones who being are targeted for that. But other than that, it is a must do, also because of the reason that you have said earlier or to the hacking, scamming, and the sueing of the regulators.

For it to be more effective or to give us more assurance, maybe the exchange should prepare a kind of legal document that we will be signed. I think it's also possible that the key to the lock funds will be hold by multiple trusted people. That should lessen the chance for a single people to ran away with it.

shawonngp

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Quote from: Wapfika on December 06, 2023, 12:42:25 PM

Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

Apparently, the funds are self-funded and designed to safeguard users' assets against hacks, harsh market conditions, etc. In my opinion, this is a commendable practice by the CEX and will undoubtedly instill confidence in users when using the platform in the future.

Perhaps other platforms should adopt this culture moving forward?

Although this is just another shill by Bitget to highlight one of their feature but I guess already have one of this feature and in fact started this even before Bitget. I’m not sure if other exchange done this but Bitget is not the one who started it so stop sharing like Bitget started it.

Besides I’m not sure if that funds is really secured if they are still the one holding it and not in the care of an escrow which will act once the condition met because this protection funds can be voided anytime once the CEX itself already taken the fall.

I did not heard before saw this op about Bitget exchange protection funds for their users safety. Definitely it's a good initiative to build users trust, As far as i know Binance is the first exchange they implement SAFU worth of 1 billion dollars, Then several good exchanges started it.

stompix

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Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

Apparently, the funds are self-funded and designed to safeguard users' assets against hacks, harsh market conditions, etc.

What happens if the safe funds are hacked?
Because if you safe guard your safe fund with the same tech your guarding your customers funds then they are just as easily to hack, right?

Quote from: taufik123 on December 06, 2023, 05:01:26 PM

The SEC crackdown and compliance issues only apply to CEXs that want to establish business in the US, but outside the US CEX is free and will not be pressured by the SEC as experienced by Binance and other exchanges.

Oh yeah, the evil SEC and regulations, you know what regulations the SEC wants to impose? The same as Japan!
And speaking of Japan, you know which FTX clients have their funds safe? The ones in Japan! You know which exchange fled Japan because they didn't want to separate the clients funds from their other business? Yeah, Binance!

Yeah, keep cheering for exchnges that are free to do as they please, we know how this ends!

Quote from: taufik123 on December 06, 2023, 05:01:26 PM

The SEC's action will not affect the Exchange for the whole, they have a limited working area only in the US and see how currently, there is no major impact after the SEC sued Binance, instead Bitcoin today reached $40k++.

That's because CZ and Binance are like cancer cells of course things are better with them turning to nothingness!

Latviand

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Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

Apparently, the funds are self-funded and designed to safeguard users' assets against hacks, harsh market conditions, etc. In my opinion, this is a commendable practice by the CEX and will undoubtedly instill confidence in users when using the platform in the future.

Perhaps other platforms should adopt this culture moving forward?

That's going to be an expensive endeavor to do because that would mean you're going to be putting a reserve for something that may not happen and it's probably not going to be enough to satisfy the users of the said exchange because I'm sure that the protection funds aren't going to be giving back 100% of their funds that was stolen in that exchange so I'm a bit on the side of not approving this because it's not sustainable for the company but if they can do it because they have the funds then it's the best approach.

I may have said that it's the best approach but at the grand scheme of things for the CEX, they're better off investing towards improving their security so the people that are using their service can sleep better at night knowing their funds are safe from attacks, having a protection fund is awesome but it's a band-aid solution to the underlying problem which is the hacks and cyber attacks done on exchanges to steal their funds.

MusaMohamed

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Quote from: taufik123 on December 06, 2023, 05:01:26 PM

It is worth knowing about the SAFU fund.

SAFU Exchange fund amount
Binance SAFU: $1B
OKX Risk Shield: $700 M
Huobi Security Reserve Fund: 20,000 BTC
Bitget Protection Fund: $410M
SAFU Gate: $100 M
Coinbase Insurance: £150 (Protection for UK Customer Account)

Binance took a leading role to do it among many cryptocurrency centralized exchanges but they are the first exchange was attacked by DOJ because of they let criminal money flow into their exchange.

I am sure Binance is not the only centralized exchanges have that problems but they were chosen by the USA. government as a biggest target to take down. Rumor is this action relates to BlackRock and chances that big business in the USA. will get benefit from Bitcoin Spot ETF approvals in 2024. They don't want to do it when Binance is still the biggest cryptocurrency centralized exchange and can take advantage of it.

Could you share where (what website) you get those figures please.

I only knew this one from Binance https://www.binance.com/en/proof-of-reserves

Husires

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Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

Despite it all, I was browsing through Twitter (now X) in search of the next meme gem. Came across an article that caught my attention.It stated that Bitget's protection funds have reached an all-time high valuation of $410M. Out of curiosity, I delved deeper into the article and was impressed by what I discovered.

Assuming that this information is correct, this does not guarantee that all clients’ funds are insured. We cannot know the total deposits compared to the insurance amount, which may be $410M or much more. Therefore, without the presence of regulatory bodies and parties that investigate the licensing of these platforms and ensure that these platforms have a certain limit. From customer funds to services for storing and accessing those funds to regulatory parties, all of them are promises that may be broken with the first problem or hack.

Kelward

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Quote from: livingfree on December 06, 2023, 04:38:27 PM

Is Binance's SAFU the same with this protection fund of Bitget? Yes, it could just be a shill to make it look good but here's my tea on this one.

It's not going to change the fact that CEX remains as a CEX even with these features. As long as they're not providing its customers the custody to own over the coins they deposit, whether there are insurances or protection funds, nothing will change that fact.

It might be a good feature but do you think that it's good to rely on it because they have that sort of protection? The best protection is you alone to hold that key of your funds.

User protection fund is good, it at least gives their customers some assurance that their funs is secured, no matter what happens. Assurances like this are necessitated by the fact that people are loosing confidence in exchanges, even the well established ones, due to obvious observations that have been happening lately.

Truth remains that even with these features, as you've observed, as long as their customers do not have control over their coins in the exchanges, then there's no full assurance, in the case of the exchange shutting down.

Iamcrypticguy

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Quote from: Stalker22 on December 06, 2023, 02:41:25 PM

It is definitely been a tough year for the big centralized crypto exchanges. Between dealing with regulators breathing down their necks, the crazy volatility in crypto markets, and some high-profile hacks, these companies have had their hands full!

But one thing that really bugs users is the lack of transparency from some of these exchanges and when something goes wrong with your account or a trade you can feel totally powerless getting any real help or answers from them. And that doesnt exactly inspire confidence!

Security is clearly another huge issue plaguing the industry too. The CEXs have gotta keep working to lock things down and protect user funds better. Bitget's new protection fund seems like a good effort on that front. But one fund isnt gonna be any kind of cure-all here.

The exchanges need to tackle the deeper problems undermining trust if they really want to assure users and give them confidence again.

Theres definitely still work left to do on that front!

Sure there's still work left to be done mate. But their protection funds is a good start. Let's hope they keep the momentum going.

Iamcrypticguy

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Quote from: Heulahee on December 06, 2023, 01:27:21 PM

Bitget is also a good exchange though, but there are many other centralized exchanges that users like to trade in. First of all, I have to talk about Binance as it is one of the world's best exchanges user can also store their fund even with having so many risks in centralized exchanges but they also hold their fund in Binance. And Kucoin Exchange is also used by different traders to get some good trades there because it also has a good trading volume. If the number comes about the Bitget then no one can say that bitget is not good, because it has even a strong security as compared to many exchanges.

You're right. The culture of protection funds should be encouraged in exchanges that don't have this extra layer of security yet, in my opinion. Good to see cex like binance and bitget standing tall

Palazodeen

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Quote from: Stalker22 on December 06, 2023, 02:41:25 PM

It is definitely been a tough year for the big centralized crypto exchanges. Between dealing with regulators breathing down their necks, the crazy volatility in crypto markets, and some high-profile hacks, these companies have had their hands full!

But one thing that really bugs users is the lack of transparency from some of these exchanges and when something goes wrong with your account or a trade you can feel totally powerless getting any real help or answers from them. And that doesnt exactly inspire confidence!

Security is clearly another huge issue plaguing the industry too. The CEXs have gotta keep working to lock things down and protect user funds better. Bitget's new protection fund seems like a good effort on that front. But one fund isnt gonna be any kind of cure-all here.

The exchanges need to tackle the deeper problems undermining trust if they really want to assure users and give them confidence again.

Theres definitely still work left to do on that front!

Obviously there is still a lot to be done but it's good to also celebrate the wins recorded to better the industry. Few years back there was nothing like PoR and user protection fund but FTX collapse opened a new portal for exchanges to be more transparent in their dealings. Moreso some exchanges are now compliant with different country regulators but we still a couple evading it. If Binance didn't have protection fund, perhaps many users will have quickly removed their money from the exchange after the allegation of money laundering against CZ so Bitget also growing their own protection fund is a welcome idea but of course still need to do better. I think their security is also good because I haven't heard about any hack on the CEX.

tvplus006

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Quote from: Wapfika on December 06, 2023, 12:42:25 PM

Although this is just another shill by Bitget to highlight one of their feature but I guess already have one of this feature and in fact started this even before Bitget. I’m not sure if other exchange done this but Bitget is not the one who started it so stop sharing like Bitget started it...

Yes, indeed, the first to create a Safe Asset Fund for Users (SAFU) is the Binance exchange. And it was done back in 2018. And today, the specified fund amounts to $1 billion, which is the largest among all cryptocurrency exchanges - https://www.binance.com/en/blog/community/topping-up-safu-to-$1b-8460049926432191856. And the fact that other exchanges have followed the example of Binance is positive for all users of centralized exchanges.

Potato Chips

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To be fair, it's not just bitget who adopt such practice, there are others as well and I'm pretty sure they're not first one as well.

I guess it's better than nothing but never let it create a false sense of security on you and still practice recommended precautions when it comes to any custodial service e.g. don't treat it as a storage. Who knows if every user will be covered in full in case a big hack occurs + afaik, the funds are fully managed by the service itself as well.

Marvelman

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Yeah, CEXs have been dealing with loads of issues recently. Can't blame folks for feeling wary bout trusting them. But even with the risks, there's still plenty that attract traders. Take Binance - it's one of the most widely used exchanges globally and users seem fine parking funds there, despite the centralization and all the risks.

I am not familiar with Bitget's protection funds, but I doubt that will significantly threaten the position of the top exchanges.

batang_bitcoin

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Quote from: gunhell16 on December 06, 2023, 07:07:21 PM

It's really different that you put our crypto assets where we are the only ones who have the ability to control them and no one else handles and controls them

That's the reason why it's a different feeling when you have full control to your assets that the Centralized Exchanges don't want people to realize these days. They're putting some SAFU and protection features for people to think that they've always been safe.

Quote from: gunhell16 on December 06, 2023, 07:07:21 PM

compared to the fact that we have assets that are placed in CEX where they have control and not us.

Aside from having control, they can do anything that they want with the funds. They can reinvest it somewhere else like the bank does and make use of the funds and what you're looking at your account are merely numbers.

gunhell16

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Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

It's been a challenging year for many exchanges due to factors like the crypto winter, SEC crackdown, and compliance issues. CEXs such as Bittrex, Huobi, Bybit, and even Binance have faced issues in recent months, causing users, including myself, to be hesitant in their approach to interacting with CEXs.

Despite it all, I was browsing through Twitter (now X) in search of the next meme gem. Came across an article that caught my attention.It stated that Bitget's protection funds have reached an all-time high valuation of $410M. Out of curiosity, I delved deeper into the article and was impressed by what I discovered.

Apparently, the funds are self-funded and designed to safeguard users' assets against hacks, harsh market conditions, etc. In my opinion, this is a commendable practice by the CEX and will undoubtedly instill confidence in users when using the platform in the future.

Perhaps other platforms should adopt this culture moving forward?

Before, I was using Binance, but this time not anymore after the events that it was hacked. It's just a bit worrying to put money into Cex like this, to be honest. After all, there are still many that can be used to trade properly and carefully.

It's really different that you put our crypto assets where we are the only ones who have the ability to control them and no one else handles and controls them, compared to the fact that we have assets that are placed in CEX where they have control and not us.

taufik123

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The SEC crackdown and compliance issues only apply to CEXs that want to establish business in the US, but outside the US CEX is free and will not be pressured by the SEC as experienced by Binance and other exchanges.

The SEC's action will not affect the Exchange for the whole, they have a limited working area only in the US and see how currently, there is no major impact after the SEC sued Binance, instead Bitcoin today reached $40k++.

And related to SAFU, doesn't Binance have larger funds compared to Bitget.
Bitget is a new Exchange and indeed good enough for the newly built Exchange class.

It is worth knowing about the SAFU fund.

SAFU Exchange fund amount
Binance SAFU: $1B
OKX Risk Shield: $700 M
Huobi Security Reserve Fund: 20,000 BTC
Bitget Protection Fund: $410M
SAFU Gate: $100 M
Coinbase Insurance: £150 (Protection for UK Customer Account)

livingfree

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Is Binance's SAFU the same with this protection fund of Bitget? Yes, it could just be a shill to make it look good but here's my tea on this one.

It's not going to change the fact that CEX remains as a CEX even with these features. As long as they're not providing its customers the custody to own over the coins they deposit, whether there are insurances or protection funds, nothing will change that fact.

It might be a good feature but do you think that it's good to rely on it because they have that sort of protection? The best protection is you alone to hold that key of your funds.

milewilda

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Quote from: Wapfika on December 06, 2023, 12:42:25 PM

Quote from: Iamcrypticguy on December 06, 2023, 12:36:38 PM

Apparently, the funds are self-funded and designed to safeguard users' assets against hacks, harsh market conditions, etc. In my opinion, this is a commendable practice by the CEX and will undoubtedly instill confidence in users when using the platform in the future.

Perhaps other platforms should adopt this culture moving forward?

Although this is just another shill by Bitget to highlight one of their feature but I guess already have one of this feature and in fact started this even before Bitget. I’m not sure if other exchange done this but Bitget is not the one who started it so stop sharing like Bitget started it.

Besides I’m not sure if that funds is really secured if they are still the one holding it and not in the care of an escrow which will act once the condition met because this protection funds can be voided anytime once the CEX itself already taken the fall.

Bolded part which it is really that 100% true. If they are still the ones who had been holding or in control with those funds then its not really that totally a user protection on which we know that it is really just that a BS
thing on what they are trying to claim here. We've seen that this cant really be just that possible if we do speak about security. There's no guarantee that those funds wont really be that used
or would really be able to experience those kind of possible unauthorized transactions. As long it does have that central authority, there's no way that it could really be totally secure.
This is why we should really be that attentive on whatever things that we do able to read up online such as this one.

If you are curious then it would really be just that wise that you should really be making out further research and trying to find out if there are current existing and dont easily
believe on whatever claims that these platforms been saying or making. Using up your own common sense would suffice on trying out to see whether it is really that
possible or really just that simply bullshit thing that they are claiming.

Topic: User protection funds, Should more cex adopt this culture? (Read 175 times)