Which Crypto Exchange is Putting YOUR Funds Most At Risk ?
Published by medium.com in scam crypto · 10/8/2018 15:21:00
Which Crypto Exchange is Putting YOUR Funds Most At Risk ?
Did you know that as of today, 3 of the most prominent crypto exchanges are putting $1.5 billion at risk? Do you have an account with one of them?
If you’re reading this blog, you’re probably already familiar with how a cryptocurrency exchange works. You create an account, hand over personal information, and fund your new wallets with cryptocurrency from somewhere else. In return, you can now trade all the coins listed on that exchange. It seems pretty simple and straightforward, but the fact is your funds are at far greater risk on a centralized exchange than you might think.
If you knew how much money highly regarded exchanges were keeping in their company hot wallets at any given time, you probably wouldn’t sleep so soundly. Today we’re going to look into the numbers (and probably freak you out in the process), but we’ll also show you how you can easily avoid all this risk by trading safely from your OWN wallet.
What is a “Hot Wallet”, anyway?
A hot wallet is just a cryptocurrency wallet that is “online”. Most cryptocurrency exchanges function similar to banks. Customers make deposits, and request withdrawals. To rob a bank, generally a thief needs to drive to a bank branch, and try to run off with cash.
Robbing a cryptocurrency exchange however is different; hackers can digitally penetrate the online systems of exchanges, and drain all the customer deposits that exchanges store in their “online” or “hot” wallets. All without leaving the house.
The obvious solution is for cryptocurrency exchanges to not store customer funds on computers connected to the internet. In the industry, this is known as “cold” storage, and many exchanges do it. Sadly, it appears some take it more seriously than others…
Below we entered the public addresses of a few exchanges hot wallets in to Faast to show just how much certain companies are keeping in them. Some of these exchanges also have cold wallets on the side, but the amount of customer funds they are putting at risk is still, uh, alarming…to say the least.
All exchanges need hot wallets to ensure their customers can make regular deposits and withdrawals. But when selecting who you choose to trust with your cryptocurrency, ask yourself: “Do they really need to putthatmuch money at risk?!”
After one of our staff had such a lovely experience trying to get his coins off of this site, we decided to enter their hot wallet address into Faast and see just how much money they’re holding in there:
Address:0x0d0707963952f2fba59dd06f2b425ace40b492fe Balance as of 8/9/18: $63,164,678.93 (USD)
Wow…$63 million+ just sittin’ there. In one wallet. Nicely done, but all things considered, that’s nothing. Gate.io is still a pretty small exchange. What kind of holdings are in the bigger companies’ wallets?
Address: 0x6cc5f688a315f3dc28a7781717a9a798a59fda7b Balance as of 8/9/18:$445,939,660.05
Nearly half a billion dollars, just one private key away from being stolen. “Single point of failure” does not begin to describe what we’re dealing with here.
Ah yes…Big Daddy Binance: the largest exchange in the world. Let’s see how they stack up:
Address: 0x3f5ce5fbfe3e9af3971dd833d26ba9b5c936f0be Balance as of 8/9/18: $312,081,504.74
Look at that…over $300 mil in dozens of different cryptocurrencies, all stored in one hot wallet. That’s a lot, but not as bad as OkEx, right?
Oh, we’re not done. Binance has more than one big fat hot wallet just waiting for someone to sneak along and grab those sweet private keys. Let’s check out some of the other ones. (Click on address to see graph in Faast)
Address: 0xd551234ae421e3bcba99a0da6d736074f22192ff Balance as of 8/9/18: $22,469,805.09
Address: 0x564286362092d8e7936f0549571a803b203aaced Balance as of 8/9/18: $26,002,616.18
Address: 0x0681d8Db095565FE8A346fA0277bFfdE9C0eDBBF Balance as of 8/9/18: $19,975,098.22
$380,529,027.23 spread across 4 wallets…not a single point of failure…just four really big ones instead. Much safer.
So far, OkEx is still holds a commanding lead. Surely there’s no one else out there who can top them, right?
Address: 0xfbb1b73c4f0bda4f67dca266ce6ef42f520fbb98 Balance as of 8/9/18: $694,869,909.30
WE HAVE A WINNER! No, your eyes are not deceiving you, that’s just under $700 million being kept in a single wallet by Bittrex. While we can understand that some people get a thrill out of living on the edge, this is just is insane.
We’ve actually been following this wallet for a while. Just a few weeks ago it had over a $1 billion in it. Back in December, it had around $4 billion.
Four. Billion. Dollars.
In one wallet.
I mean, what’s the worst that can happen, right ?
Let’s be clear here, we don’t WANT any of these companies to get hacked. That’s not good for anyone. We’re just giving this PSA to alert people about the inherent risks of storing vast quantities of cryptocurrency in any hot wallet. We hope this inspires them to change.
Maybe they will, maybe they won’t. But if they don’t and they get hacked while the majority of your funds are on such an exchange…well, no one thinks it can happen to them…until it does.
A Better Way to Trade
Wouldn’t it be great if you could combine the security of a hardware or software wallet with the accessibility of a hot wallet? Now there’s a way to do just that.
With Faast, you can swap 100+ cryptocurrencies straight from your own wallet, without ever needing to send them to an exchange wallet first. This means greater security since we don’t have access to your private keys and neither would any hackers if we somehow did get hacked. There simply isn’t any way you can lose your money.
Plus, our unique user interface allows to trade multiple cryptocurrencies in a single transaction. If you wanted to swap out 1 BTC for 15 altcoins (or vice versa) you can do that. Imagine being able to completely rebalance your portfolio with the push of one button. Well, you don’t need to imagine it anymore — head over Faast now and try it out for yourself!
Try out Faast with your favorite wallet today!
Here’s some quick user guides to help you get started:
MetaMask + Faast: The Easiest Way to Diversify Your Cryptocurrency Portfolio
How to Make Effortless Cross-Chain Trades with a TREZOR Wallet
How to Make Effortless Cross-Chain Trades with a Ledger Wallet