Topic: Which is better between keeping assets in exchange or personal wallet (Read 341 times)

And you really believe that promotional crap?
NO big exchange has enough funds to cover a real hack if their coldwallet security is breached and the hackers get their hands on those coins. The whole SAFU thing is just empty words, if Binance gets hacked for the +100k BTC they hold in one cold wallet there is no chance in hell you will ever see a penny, it's a closed shop and bye bye!

If they would really have a means to protect those they would insure them, but to date, no exchange was able or is willing to do so for all the funds, including Coinbase, and you can guess why, because nobody is willing to take the risks!

Good exchanges do have some insurance funds and they can compensate their users if any mishaps happens. An example for such an exchange is Binance who have "SAFU Funds" allocated for this purpose. However small exchanges do not have any funds and you will lose the money in case there is a hack on the exchange.

As a golden rule, you keep only funds which you want to trade frequently on the exchanges and keep your holdings in your desktop or offline wallets.

If you can control everything at beginning, why you don't control it.
If you waive out your control on your crypto, the only thing you can do is hope: hope exchange will secure their platform and keep your account safe. If their exchange is hacked, you only can hope they will pay compensation for you.

Newbies - Read before using exchanges or investing.

If you don't trade everyday, let's go with personal wallet.
If you trade everyday, trade with small capital portion on exchange and afford any losss from trades or from exchange compromises.

I assume by assets you mean long term hold and if that is the case then you should keep them in your personal wallet and avoid exchanges. Keep on exchanges the amount that you might be using for trading, savings, staking and for other activities. Rest should be in your personal wallet. Although I do not recommend keeping anything in exchange but big exchanges are now much secure and you can keep some assets there. But, still DYOR.

From my perspective, if you are doing a day trading or you trade regularly it's better if you keep your assets in an exchange for you to avoid spending expensive fees. But if you are only hodling your cryptocurrencies, it would be better if you store your assets in your wallet because many people says it is not safe to store you cryptos in an exchange even you used a 2FA.

I think exchanges will not shoulder the lose and will refund your assets if you got hacked because it still depends on the situation that they will investigate it, and it might be fault why your funds got stolen.

I was beginning to feel sleepy when reading through the message the ops want to pass, how can one compares personal wallet security to an exchange, no matter what promised an exchange make on reserve to cover for loses I can never trust that. I prefer to be in charge of my found to I get strong security on my wallet rather then risking my found on exchange.

It depends on your reason because if you want to trade daily or weekly, you need to keep your assets in the exchange and only send your profit to your wallet.
If you want to just hold your assets without the want to trade, your wallet will be better to hold because you control the wallet, and no one can steal your asset except you give access to other people to open your wallet.
If you want to trade, you need to remember that you don't have to use too big money to trade because the risk will be there, and there is no guarantee that the exchange can always protect your asset.
You have your assets, so you need to have a responsibility for your assets.
You can select the personal wallet that supports keeping for multi coins so that you can store all of your assets in that wallet.
Or you can just hold your asset in the hardware wallet.

The only funds that can be held on an exchange is your trading funds and it shouldn't be funds you can't afford to lose. If you're still into long term trades and using very large capital then you should move the coin to your personal wallets. There's more to just an exchange getting hacked that we're not encourage to leave our coin on their platforms. Centralized exchanges aren't any different from banks as they can restrict you from having access to your funds.

But with your personal wallets, you're in charged of your finance which is the beginning of your financial freedom journey. Exchanges that are less popular or anonymous would hardly take responsibility for the loses of their customers, majority don't even have enough funds for liquidity talk more of paying for lots funds. That advice was a wrong one, there's no good funds in exchange can do you. Coins you don't own the private keys aren't yours.

The worst thing is that the exchange itself can just freeze your account, take all your assets. Best kept in your personal wallet.

As for your question. Think about it yourself? If, for example, each person had $ 1,000 on the exchange and they were all stolen, how will the exchange recover all the losses?

Even so, there would be a lot of scammers.

It gives me joy to be here always.  I know the higher members are more than capable of solving any problem facing the newbies. I really appreciate everyone who responded and contributed in one way or the other to help me. Trust me, I've learnt even much more than I could asked for.  Thank you so much

Most exchanges did disappear after big hacks, indeed.
Very few of the exchanges did actually refund their users properly, in full and in a reasonable time frame.
As already stated, one important saying in Bitcoin community is "not your keys, not your coins", another one is "be your own bank". So the safer is to withdraw and keep the coins safe.

But before withdrawing I suggest you do some reading (and maybe asking questions too) on how to keep your funds safe.
This is important because if you are careless or simply don't know what you are doing you can easily lose your coins.

Only few instances the traders got refund when exchange got hacked because those exchanges are huge and got enough funds to fund such losses but it may not happen all the time so better keep your funds in a walket which is supposed to give full control of your funds which means you need to learn what you have to do to keep those funds secured from all those scammers.

Yes, he may be right but are you certain that an exchange will bear all the lost funds? I mean if the exchanges have been hacked then it is automatically they made lose some funds as well thus will have a chance for you not to be covered up. Yes, you can store some of your coins into exchanges but don't make it as a wallet you supposedly use it to store a few of your funds to avoid paying huge fees. In regards to storing your coins, it is still obligatory to place it in your personal wallet. You shall not be afraid of being hacked because as long as you keep your pass from yourself and store it in a good place nothing to worry about.

As some others mentioned above, respected exchanges probably have insurance for theft (hacking). Also, in case of bankruptcy, these coins always remain yours (if, hopefully,  they weren't stolen).

I've written several extensive threads on this subject and I think its importance will only grow bigger in the future, f.i. about the bankruptcy of Cryptopia: Cryptopia Judge: "1. Crypto is property 2. Even w/o keys, crypto remains yours"

So far the good news.

Remember, in case of bankruptcy, it will take a very long time before you get your coins back. If you have been speculating with shitcoins, there's a very high probability these shitcoins in the meantime will have become useless.

Check out the thread above for some more ideas on positive and negative sides of exchange vs. private wallet, flexibility vs. security etc.

In any case, if you're only planning to hodl and not to speculate or to trade, the safest place to keep your coins is in an offline paper wallet.

A general rule is to store some of your money in exchange if you trade regularly (only use 1 or 2 that are reputable on your country). If you don't trade at all, keep it in your own wallet. Don't gamble with the possibility of hacking or repayment since the risk is usually bigger than you expected.

If the hack is minor, exchange may bear the loss but in case it’s big, they will go bankrupt for sure. Your first friend have no idea.
To compare the better place to keep your crypto asset-
Would you love to keep your fund in your hand where you can do whatever you wish with the fund whenever you wish or you want to keep your asset to someone else who don't give you the control? Which one seems better should be the best.

Only very few exchanges can take responsibility of things how wrong, it's better to take my advice and never trust your fund with any centralized exchanges either top or small, always move your coins back to your wallet, they are more safer in your own wallet, that's why we need to keep our wallets recovery seeds or private keys because that's the only thing we need to recover our funds if anything happen to our smartphones or PC, do not entrust your assets to any exchange

It depends on what you mean by "assets" and also your view of those "assets future".

For example I don't see any long term future for any of the altcoins, ergo I only trade them to make profit. This means I can never withdraw any of these altcoins to my wallet to "store" them locally because that would be riskier since it takes time to withdraw and deposit and altcoins get dumped in a blinking of an eye and I want to be able to act fast in selling before the dump gets bigger.
Another issues is that storing a lot of altcoins locally requires trusting either a lot of wallets or one single closed source multicoin wallet since I have not seen any fully open source ones. That process is tedious and highly risky. I can't go through multiple coin's code specially when majority of altcoins are not popular enough to trust someone else has already done it. And as I said the alternative choice is closed source so I can never trust them.

But when it comes to bitcoin, I believe in the long term potential and even if I trade it still is in favor of making more bitcoin so I would never leave it on any exchange more than it is needed.

It depends on which exchange the hack took place, not all exchanges will be able about to do reimbursement after been compromised, some exchanges will go down and never recovers after a hack and that's good bye to your fund, do not listen to your friend mate, download a private wallet and store your coins in it not on exchange.

Saving in a personal wallet also does not guarantee security, as most of the risk factors are with you.
Also pay attention to the types of assets that you will store in your personal wallet. If you think that storing a centralized type of crypto will have no risk at all except from you, that's wrong.
We learned how the Kucoin hacker transferred a stolen asset to a personal wallet. And ... his assets are frozen in his wallet under his own control. It is a worry and gives rise to the belief that striving to secure assets to personal control does not guarantee safety from the control of others.

The most secure asset stored in a personal wallet is Bitcoin.

It depends on the amount of money as well, as how long you keep? If you have a large amount of money i would suggest to you keep it on your personal wallet and if you are afraid of being hacked, it's really funny. If you use it carefully, then no hack will attack your wallet as for assets in exchange, i think just transfer a sufficient amount of money to be able to trade and invest

Thats correct mate especially if those exchanges you are using have no insurance like small exchanges some big exchanges promised a safe funds like Binance who have a SAFU feature but we cannot really sure if this is 100% an assurance or just a false advertisement to attract users in their platform but the very best thing to do is if you want to hold your assets for a long period of time send it to your personal wallet. 

A very bad idea to keep your token or coin in the exchange there is a risk in doing so

first, if the exchange gets hack your money is gone, I mean everything in there will be lost, then the exchange withdrawal will be disabled no deposit either, then the investigation will take place, remember how long will it take for the result, and there is no guarantee they will return 100% of the value you were kept there, the best thing is to keep it where you have keys, your personal wallet yea you need to transfer it with the fee but you are sure that its safe, forget about the small amount of fee's, at least your safe, remember on what other is saying " not your keys not your coins" this is always important.

The latter is telling the truth. Although your first friend who said it's fine to keep assets in exchanges because they will refund it. It just so happen that the affected and hacked exchanges last time can cover their losses.

But it doesn't go in general.

What if you chose an exchange and got hacked and they've got no cover and fund to retain every users loss in their exchange?

It is always best to keep your assets in a private wallet that you own the private keys / seed.

Probably he whispered the last part and you didn't hear it.
"...if you're lucky"

Does your friend know what happened from Bitcoinica and MtGox till Quadriga and Cryptopia ?
Here is a nice read for you and your friend.


One that believed things like "Funds are SAFU" or stupid claims about having x amount insured by some god knows what bank? How many scam projects and fake exchanges have claimed this in the past? There are plenty of newbies that believe a lot of things even worse than flying pigs, I'm not surprised somebody would think exchanges have some sort of reserve funds or the money is guaranteed by the government like in banks. Actually, I would be surprised if they would less a few thousand the ones that think like this.

Only keep your assets in an exchange if
1. You are a frequent trader or day trader and moving them back and forth might be costly
2. If you can afford to lose them in case things go south.

Otherwise, it's totally not a good idea to leave your assets in there because anything can happen to an exchange from hacks, exit scams, bankruptcy to Government seizure of the exchange domain or servers and one could easily lose their assets

At the beginning of October, 75 Crypto Exchanges had already shut down since this year started

Not all exchange can refund hacked amount your lucky if one of the exchange holding your crypto give it back to you once they are hacked .most of the time they close the exchange and become bankrupt after such event.

Cryptopia is one of the example there are also exchange turn to be scam in long run ccex is one of them . So the suggestion of your friends is not true, it's better to put it in a wallet that you can secured than trusting your money to any 3rd party services.

Keep your Bitcoins in a private wallet, NOT on windows and NOT on a computer you use for browsing and playing games or anything else.
There are plenty of windows viruses directed at hacking, recording passwords and specifically trying to access wallets.
Windows antivirus programs do not protect your from viruses, they only protects you from known viruses.
https://kano.is/index.php?k=bitcoin

The best thing for you is the keep your coin in your private wallet. All you need is to keep your private key safe.

What sort of friend recommended such a stunningly stupid choice? They are saying it's good to be in an exchange in case it's hacked? If it was in your own wallet you wouldn't have this possibility.

There are many piece of shit exchanges that wouldn't survive a major hack. And some larger ones too.

You also have a much more likely event of you being hacked and someone accessing and emptying your exchange account. You get nothing from any of them in that situation.

I haven't been here for very long, and I still read and learn for the most part. But as far as I understand, the best way to store your coins is on devices called "hardware wallets" or on "cold storage" devices, such as some type of metal plates or chip cards. Such devices work offline, making it harder for hackers to gain access to your funds through malware and similar software.

I'm expecting the senior members to correct me if I overlooked something.

With your crypto funds you ought to take the responsibility of "being your own bank" and that has to do with protecting your funds yourself, of course quite a lot of people have lost their funds from their own follies, but thing is part of that responsibility is learning what you should do to make sure your funds are safe, asking questions, reading articles and making sure you're following the best security protocols; with this method, you have your funds and your keys without a third party and if you take this responsibility seriously, you'll definitely not lose your funds, at least your fate rests in your hands unlike on exchanges.

Having said that, exchanges are centralized and are third party services, if you leave your funds there and give them the responsibility of being your bank for you, how sure are you they'll take up that role seriously, we've seen exchange workers make mistakes that leaks data of their customers and makes them vulnerable to phishing attacks; then there is the other possibility of the exchange being hacked and your funds gone, crypto is not like the financial traditional institution, you'll most likely not get your funds back in a situation of a hack, and since Bitcoin was designed to eliminate a third party, then you're better of " being your own bank".

There is also a saying that "If you want something done well, you do it yourself".

You may want to ponder this: Hacked Exchanges since 2011.

From a refund point of view, few Exchanges have had the capacity to support a hack out of their own finances, and those that have, has more to do with the amount being a fraction of their own reserves than by anything else. Some may have partial insurances, but have no doubt, that if an Exchange is hit really hard, it will likely tumble and fall, leaving you empty handed.

Having said that, you call also lose your crypto if you practice the "be your own bank" policy. Hacks and malware occur at a personal level too, and people can be clumsy both in terms of security, and in managing things for themselves.

How good are you at security?

Do you frequent weird and random websites, do you get a lot of popups when you browse the Internet, do you have antivirus?

If you have av and don't click random links, run random apps or visit strange sites you can probably safely store the funds yourself.

Exchanges likely don't have insurance for a loss of funds (I don't think one exists) so if they got hacked, your funds and many other people's funds are gone. Bitfinex got "hacked" a while ago and they credited everyone the dollar equivelant in a token they'd then repay. If you're happy with a random 33% of your fund sbeing liquidated and getting replaced by what could be a lower amount of payment then store them on an exchange if you really think you're incapable of keeping 12 words securely stored/a computer infection free.

A friend told me few weeks ago to keep my assets in exchange because if the exchange got hacked or my assets are misplaced, the exchange will bear the lose and refund my assets. Just yesterday, someone told me it's a lie that most exchange will go bankrupt if that should happen. I'm really confused right now. More experienced members should please enlighten me.