Cryptocurrency markets are volatile, sentiment-driven, and are high riskier pool for investment. Crypto exchanges losing their value to peanuts and investors’ money drained to zero in a very blink of a watch – could be a scary scenario but an expected one when trading in sensitive assets called cryptos. There are ample samples of how your wallet in cryptos may be trimmed to nil overnight, and therefore the LUNA delisting currently being the most recent example.
There are numerous risks within the crypto market like cybercrimes, phishing, impersonations, Ponzi schemes, frauds, scams, market impacts, and regulatory limitations among others. Let’s just put it this manner, your crypto money also will be bankrupt.
In but two, Terra USD’s sister token, LUNA went from over $119 on April 5, 2022, to literally at zero levels. Just last month, Terra was the talk the town, making massive gains, adding hefty to investors’ pockets, and giving a promising trajectory for the crypto market. And now suddenly, this great crash has led to raising many questions about the steadiness of crypto markets.
But the fact is, as long as, there is not any regulatory backup and extensive safety protocols within the crypto exchanges, likelihood is that your investment in cryptocurrencies will lodge in risk. Additionally, they’re addicted to their partners’ operations, liquidity, and status for the right maintenance, use, and safekeeping of those customer assets. However, any failure by the crypto platform or their partners to keep up the required controls or to manage customer crypto assets and funds appropriately and in compliance with applicable regulatory requirements could end in reputational harm, litigation, regulatory enforcement actions, significant financial losses, lead customers to discontinue or reduce their use of the products and lead to significant penalties and fines and extra restrictions, which could adversely impact their business, operating results, and condition.
As of March 31, 2022, Coinbase holds a whopping $256 billion in custodial fiat currencies and cryptocurrencies on behalf of consumers, as per the filing. If that’s the case, if a crypto exchange does go bankrupt chances are high that that your crypto assets are going to be pushed to bankruptcy. But there are ways to guard your crypto assets even when a crypto exchange goes bankrupt. The simplest option may be a non-Custodial crypto wallet.
On its website, Coindesk explains, that DEX coordinates large-scale trading of crypto assets between many users. They are doing that entirely through automated algorithms, rather than the standard approach of acting as a financial intermediary between buyers and sellers. the thought behind a DEX is “disintermediation,” which implies removing middlemen to permit regular people to try to business directly with each another. Instead, users directly hold all their assets in their own wallets in the least times.
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