Crypto exchanges are a vital part of the cryptocurrency world. Without them, it’d be impossible to exchange cryptocurrencies in real-time – they’re the cornerstone of the markets. However, despite their importance, they’ve been involved in several scandals.
This article will share with you the biggest scandals with crypto exchanges, and bring you tips about how to protect your crypto holdings. Therefore, read this before you buy bitcoin to start trading.
What were the biggest crypto exchange scandals?
We can’t start this section without talking about the biggest crypto exchange scandal of our era: Mt. Gox. In 2014 they were managing 70% of all the BTC transactions in the world… but then they claimed that 850,000 BTC from their clients were missing or stolen.
They liquidated the company and left their customers with literally nothing. And as you can guess, this drove the BTC price down.
Until now, this prevails as the biggest crypto exchange scandal of our history, given that they stole over 850K BTC. Until now, they have to fight billionaire lawsuits, like CoinLab’s.
Now, let’s talk about other scandals that shocked the cryptocurrency world.
Poloniex has become a minor player in the market, but in January of 2020 they alerted their users to quickly change their password but they had been compromised due to a data breach. Even though they argue that many of the emails didn’t correspond to actual accounts on Poloniex, these data breaches leave their users exposed to horror stories like Mt. Gox.
This lesser-known exchange was one of the most popular in Italy until they got hacked and lost all of its funds. Clients lost all of their crypto holdings, and until now, they have not gotten positive news. Unfortunately, this type of theft is very hard to track down.
Although a minor incident, this small exchange suffered the loss of $250,000 from their clients’ funds. In comparison to previous scandals, this one stays as one of the smallest in history.
Should you leave your cryptocurrencies in an exchange?
After knowing all about Mt. Gox, Poloniex, Altsbit, and Bisq, do you really feel comfortable leaving your funds in a crypto exchange? Until now, the main players like Binance have not suffered any sort of leak, attack, or hack, but we never know what could happen.
There are always hacks, cyber-attacks, and exit plans… so you need to be careful about your own investments. To protect you from being a victim of these scandals, we recommend you follow these tips.
Invest in a proper cold wallet
There are excellent choices in the market like Ledger, which can actually protect your crypto holdings from being stolen. They protect your private keys, and they can even request a PIN before authorizing a transaction. If you want to stop hackers from stealing your crypto holdings, then this is how you do it.
Only move what you want to sell
When the crypto prices start to move up, then it’s better to start selling gradually. Therefore, only move to a crypto exchange the cryptos you want to sell. Once you’re done with that, send the stable coins to a safe wallet.
Use strong passwords and F2A
You should use strong passwords for your accounts in crypto exchanges, and on top of that, using F2A. Be it with your email, phone, or Google Authenticator, always use this. This way, you will add another layer of protection for your accounts and your assets.
What is the best solution for moving your funds?
Now that you know how to protect your assets, then you should be able to move them fast and at a low cost. Unfortunately, for coins like ETH, the fees can be high, especially when the network is congested.
However, if you want to move your profits back to a safe wallet without paying a lot in fees, then you must use USDT with the Tron Network. You will pay a very low fee, which is usually only 1 USDT. No matter how much USDT you want to move, the Tron Network will keep it cheap for you.
For other coins, you need to play it smart and identify the best moments to sell it. So, even if you lose some in the process of moving them, at least you know you can save money when returning your funds to the safe wallet. Analyze the market, sell gradually and you will protect your capital.
The crypto exchange scandals are real, and you need to be aware of them at the hour of investing your money. Always play it safe and use them smartly, by following the tips we’ve given you in this guide. Let us know what you think in the comments section!