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Crypto Exchanges Are Blocking Bitcoin Withdrawals
Keeping your Bitcoin or digital assets on exchanges and crypto services is an act of trusting others with your money.
And it's proving to be a dangerous move.
In the past few days, Celsius (a crypto lending service) and Binance (a crypto exchange like Coinbase) temporarily paused withdrawals of Bitcoin on their platforms.
We are going to show two examples of the dangers of keeping your Bitcoin and crypto on a 3rd party service and why you should move the keys of your digital assets to cold storage.
Let's start with what happened on Binance, one of the world's most popular crypto exchanges. Here is a tweet from the CEO of Binance:
To Binance's credit, the CEO was transparent about the problem and communicated everything in an open manner. However, the pause on withdrawals lasted closer to 8 hours.
Imagine if Wells Fargo stated you could not withdraw funds from your savings account because another customer's transaction was causing a backlog... This would be unacceptable.
Fortunately, Binance has resolved the problem and customers can move their Bitcoin on and off the exchange.
Celsius's story is much worse... Here is the tweet they published that began an absolute meltdown on social media:
Celsius is a crypto lending service that offers staking and borrowing to its customers. But it appears the company is in deep financial trouble and has been forced to pause all activity (unrelated to depositing more funds or paying for a service) on their platform to prevent a complete collapse.
CoinTelegraph has also reported that Celsius has moved over $200,000,000 worth of crypto assets off their platform to the FTX Exchange (source).
All of this activity can be monitored on the blockchain since it is a publicly visible ledger.
So... What can Christians learn from Celsius and Binance?
Storing your digital assets on a 3rd party service such as an exchange, lending service, or even a credit card that rewards you with cashback in BTC is the least secure form of storage.
We cannot possibly predict the actions of these businesses, the government, and hackers.
Coinbase recently reported that customers could lose access to their digital assets if the company ever declared bankruptcy.
Governments can force exchanges and 3rd party services to fork over their assets... It happened in Canada. And there's nothing stopping it from happening in the United States, Australia, or in Europe.
Moving your Bitcoin's private keys to a cold hardware device or multi-sig storage is the ideal form of BTC security.
If you would like to learn how to move your Bitcoin to cold storage, please consider joining the Crypto Christian Community as a paid member and we'd be happy to help! Join by clicking here.
Some crypto investors like to "stake" their digital assets to earn a small reward each month and earn passive income.
The Crypto Christian cannot provide financial advice, but we encourage readers to consider a question posed to us in Anthony Pompliano's Crypto Academy course, "If you lost all the crypto that you're staking... would you cry?".
A funny but sobering question. Essentially, you must weigh the benefits of security and how much you're earning in rewards.
Again, if you would like to learn more about cold storage, we encourage you to become a member and we'll help you get started!
The Crypto Christian Team