Major Bitcoin exchanges are reportedly holding more than 1.9 million BTC in wallets. Coinbasewhich is leading the pack is holding 966,230 on its cold wallet. This leading American cryptocurrency exchange could be a disaster waiting to happen. In fact, since the 1.9 million BTC is held by a small number of exchanges; BitMEX (265,140 (BTC), Bitfinex (146,120 BTC), Kraken(136,780BTC), Bittrex (131,140 BTC), Coincheck (35,090BTC), Bitstamp, and Poloniex, they are all potential disasters waiting to happen.
Crypto exchange hacks are common. This started when cryptocurrencies became mainstream and prices skyrocketed. The hacks have menaced the industry and up until a few weeks ago, there were reports of yet another hack. South Korean exchange, Upbit, reported of an irregular withdrawal, around $51 million worth of Ethereum.
BTC Not Only Threatened By Exchange Hacks
Although many of the top exchanges have good security, cybercriminals continue to work around the clock to get access to their networks. Like many others, there is a possibility that this security is vulnerable and assets will be accessed. In some cases like QuadrigaCX, a Canadian exchange it was a matter of lost keys. The death of the exchange’s CEO, Gerald Cotten, led to the loss of keys to the exchange’s cold wallet.
Reclaiming Crypto Sovereignty
The only way to be safe from these kinds of disasters is for traders to have their own private keys. Especially those planning to hold for the long term. Withdrawing BTC from exchanges and storing them on personal wallets ensures better security for the self and the entire industry. Additionally, it removes the incentive of a big payday for cybercriminals, reducing the number of bad actors and times they try to hack. As a bonus, it will support price stability with lower supply pushing demand. Volatility on the market will fall and further support the success of crypto.
Crypto analyst and Author