I’m sure this can’t be coming as a new information right now as the trend for centralised exchanges is being insolvent. According to the CEO of FTX, Sam BankMan-Fried, he said a lot of crypto exchanges are insolvent but they are being secret about it. Well he was wrong, lots of them are beginning to prove him right. FTX was able to help BlockFi by providing liquidity to the company to prevent them from insolvency, few days ago celsius filed for bankruptcy, this was just after they halted withdrawal. This is just 2 from the list of crypto exchanges that have halted withdrawals, we have CoinFLEX, Vauld, Babel Finance and Voyager.
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These are just the companies that came out open, we still have some that are still in the secret, but then the focus is on Zipmex which is the latest crypto exchange to halt withdrawals. What does it mean for a crypto exchange to halt withdrawals? In my onion this means they are insolvent. They blamed volatility as usual for the reason behind their decision to halt withdrawal. After claiming to be the asian number one best crypto exchange, well at this point I am sure no one is surprised anymore as it is just a case of another one that bit the dust. Bear markets come with a lot of trials and just like they say, the bear season is the period where the market filters the strong from the weak and we are seeing that happen in our very own eyes. Withdrawals have been halted till further notice, this means that customers won’t have access to their funds. Another case of Not your keys, Not your coins.
I’m sure this has taught a lot of people a lesson to learn to embrace the DEX wallet more and also embrace the cold storage wallet as well. No centralised exchanges are safe, no centralised companies or platforms are safe, its just a matter of time before all they show you just how risky they are. Some of them claim to have good risk management, but this current insolvency fiasco just prove that they are all the same, taking investors money to i9nvest in higher investment plans just so they can take the lion share. The case of celsius and not giving investors back their money based on their tweaked terms and conditions is a wake up call. Hive can serve as a DEX wallet but its a hot wallet and that is the only risk associated with it. The fact its a hot wallet means that its connected to the internet and this makes it vulnerable to hack. But some coins and tokens outside the Hive Blockchain can be found on the Hiveengine wallet which can be used to store your assets. No one can control your coins or your keys if you don’t give them access to the keys.
At least this is the lesson I am picking from all of these experiences, I am currently considering buying a coldstorage like ledger, this time I will feel completely safe, because the entire safety will depend on me. My little financial life experience has taught me that sustainability is way better than high APR. High APR without sustainability just turns everything to gamble.