What is the biggest risk of keeping your crypto on a crypto exchange?

[Trush Jodie]

When it comes to keeping crypto, there is always a choice of keeping it in a normal crypto wallet or keeping it in a crypto exchange wallet. But people say that keeping crypto in an exchange wallet is risky.

I want to ask, what are the risks of keeping crypto in an exchange wallet?

 

[gwolf666]

Hi, that's a great question. The risks of holding cryptocurrencies in an exchange wallet are numerous and important to consider. First, there's the risk of hacking or security breaches on the platform, which has happened several times in the past and led to the loss of funds for many users. Additionally, centralized platforms can be subject to sudden closures or account freezes, preventing access to your funds at critical times. There's also the risk of insolvency: if the exchange goes bankrupt or experiences financial difficulties, your funds could be at risk or difficult to recover. Finally, some exchanges may be subject to stricter regulations or even mandatory closures, creating uncertainty. For these reasons, many users prefer to store their crypto in personal wallets, where they have greater control and security over their funds.

 

[Nomad]

FTX was the world third biggest crypto exchange, and when it collapsed a lot of people lost money. This is the biggest risk of keeping your assets on exchange.

 

[Fire&Rain]

Keeping crypto on an exchange is easy, but the risk is that the exchange holds the keys, not you. If they face a security breach or run into financial trouble, your coins are exposed. Some exchanges also freeze accounts without warning when they review transactions, and that can trap your funds for days or even weeks. A private wallet shifts control back to you, which is why many long-term holders prefer it. Exchanges are useful for trading, but they are not the safest place for storage.

 

[Trush Jodie]

FTX was the world third biggest crypto exchange, and when it collapsed a lot of people lost money. This is the biggest risk of keeping your assets on exchange.

Most of the people that lost funds in that collapse of FTX are yet to get their money back despite the efforts of the United States government.

 

[Suba]

The biggest risks of storing crypto on a crypto exchange include the exchange failing to operate or closing, hacking, and fraud. However, many trusted crypto exchanges now insure users' crypto, so that if hacked, users can return their funds, although this may take time. Personally, I store crypto on several exchanges, but only as trading capital, at least $200.