Are your crypto holdings safe with exchange? These 2 ways give you direct control,


How to protect your cryptocurrency holdings from hacks

How to protect your cryptocurrency holdings from hacks

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Cryptocurrency investors not only face market volatility but also face an additional threat of losing their entire holding if the exchange were to go bust. A tough regulatory environment and trading platform’s exposure to super risky investments could increase these risks manifold. The recent LUNA delisting is a case in point of investors losing their holdings overnight.

From June 1, Indian exchanges anticipate a drastic reduction in trading volumes with the introduction of Tax Deducted at Source (TDS) on trades— a scenario that is likely to cause exacerbate operational concerns for over-leveraged platforms.

The recent crash in TerraUSD, a stablecoin pegged to the US dollar, and its native token LUNA saw $400 billion of investors’ wealth wiped out from the market, causing turmoil in the crypto world which caused a rout in other tokens as well. Investors are also exposed to the new vulnerability of crypto exchanges facing a crisis when investors pull out billions of dollars from the market in a bank run of sorts.
Coinbase, one of the largest cryptocurrency platforms in the world, in a recent US Securities & Exchange Commission (SEC) filing said crypto assets are not insured or guaranteed by any government or agency. It further said the success of offerings is dependent on public confidence in them and how their partners manage investors’ assets, It further said it is dependent on partners’ operations, liquidity and financial condition for proper maintenance and safety of investors’ assets.

“Moreover, because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors,” it further warned.

The filing gives a telling account of the myriad vulnerabilities of exchanges, trading platforms and their partners offering products on such platforms. The best bet that crypto investors have to safeguard their assets is a non-Custodial crypto wallet.
A non-Custodial crypto wallet allows management of assets in the hands of investors as compared to Custodial crypto assets that are managed by third parties and only allow investors to send or receive money. In such a wallet, the investor has complete control over their assets and are therefore less risky as the information remains with the customer. A non-Custodial crypto wallet is usually hardware-based physical mediums, usually USB drives, which are offline, adding another layer of protection against hacks or data leaks unless the user shares the details with someone.
Also, Decentralised Crypto Exchanges (DEXs) are blockchain-based apps that offers lower fees and allows customers to own crypto assets directly, eliminating regulatory or bankruptcy risks.



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