this is why you don't keep your coins on exchanges

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I don't care how "safe" your exchange seems... you need to get ur BTC off coinbase, kraken, crypto.com ASAP and get them into self custody using a ColdCard wallet.

Not your keys, not your coins...

Below are 7 real world examples of why exchanges are risky and cannot be trusted no matter their track record and no matter how "trustworthy" and "reliable" they seem.

I've also linked to a documentary for 6 of them so you can sit back, relax, and enjoy as you learn about the history of crypto.

1. Mt. Gox

My sister got screwed with this one...

Year: 2014

Losses: 850,000 BTC (worth 101 BILLION today)

Mt. Gox was the original crypto catastrophe... Mt. Gox handled over 70% of all BTC trades before its collapse. It lost hundreds of thousands of BTC due to a long-running, undetected hack.

CEO Mark Karpeles was arrested for data tampering (though not for the hack).

Creditors have spent over a decade waiting for payouts—some are finally receiving partial repayments in 2024–2025.

Before its collapse, Mt. Gox was by far the dominant Bitcoin exchange, handling the vast majority of all global BTC trades.

It was considered the central hub for Bitcoin trading, and its failure sent shockwaves through the nascent crypto market, leading to a significant drop in Bitcoin's price and a period of deep mistrust.

2. Bitfinex

Year: 2016

Losses: 119,756 BTC (worth 14 BILLION today)

Hackers exploited Bitfinex’s multi-signature wallet system (shared with BitGo), draining hundreds of millions worth of Bitcoin. The hack led to a 36% haircut on all user balances, which were replaced with "IOU" tokens (BFX).

In 2016, Bitfinex was one of the top 3 exchanges..

The hack caused an immediate 20% plunge in Bitcoin's price, demonstrating its significant impact on the market.

While not an outright collapse, the "haircut" on user balances and the subsequent IOU tokens severely impacted user trust and led to a period of uncertainty for the exchange and the broader market.

3. BitConnect

Year: 2018

Losses: Estimated $1–2 billion

BitConnect was a textbook Ponzi scheme disguised as a lending platform with a fake “trading bot.”

Investors were promised 1% daily returns. The scheme exploded in popularity — even promoted by influencers — until it collapsed.

The BitConnect token went from $470 to under $1 overnight, and lawsuits and arrests followed. It’s now a meme in crypto history.

BitConnect was incredibly popular and widely promoted by influencers, leading many to believe in its unsustainable promises of high returns.

Its collapse was a stark lesson for many new crypto investors about the dangers of Ponzi schemes and unregulated platforms. The market sentiment was one of widespread shock and disillusionment, as the token's value plummeted almost to zero overnight.

4. QuadrigaCX

I used this exchange and got my coins out right before it crashed. My friends were not so lucky...

Year: 2019

Losses: $250 million CAD ($190 million USD)

QuadrigaCX was widely believed to be Canada's largest cryptocurrency exchange at the time of its collapse, with 363,000 registered users.

The Canadian exchange went dark after its CEO, Gerald Cotten, reportedly died in India—taking the only access to customer funds with him.

It was the most trusted platform within Canada and went under overnight with no warning.

5. Celsius

I think

@Daniel Bissonnette

lost some $$ on this one...

Year: 2022

Losses: Over $4.7 billion

Celsius was a very popular platform, boasting 1.7 million users and billions in assets under management by May 2022.

Celsius positioned itself as a high-yield “crypto bank,” offering massive interest on deposits.

But under the hood, it was a house of cards.

CEO Alex Mashinsky misled users and used customer funds for risky investments.

When the 2022 crypto downturn hit, Celsius froze withdrawals and filed for bankruptcy.

In 2023, Mashinsky was arrested and charged with fraud.

Celsius was widely trusted by users due to its promise of high yields and "banking-like" services.

6. FTX

Year: 2022

Losses: Estimated $8–10 billion

Founded by Sam Bankman-Fried (SBF), FTX was one of the world’s most trusted exchanges until it imploded overnight.

Customer funds were secretly funneled to SBF’s hedge fund, Alameda Research, to cover risky bets.

When users tried to withdraw their funds en masse, the hole was exposed.

SBF was later convicted of fraud and faces decades in prison.

Prior to its collapse, FTX was a dominant force in the crypto market, ranking as the third-largest cryptocurrency exchange by volume with over a million users.

It was widely popular, trusted, and seen as a legitimate player, even attracting significant institutional investment and celebrity endorsements.

Its sudden and spectacular implosion, revealing deep-seated fraud and misuse of customer funds, sent shockwaves through the entire crypto industry, leading to a significant loss of confidence and a prolonged bear market.

7. Bittrex

Year: 2023 (Shutdown and bankruptcy)

Losses: Users in limbo, unknown exact amounts frozen

Once a top 3 U.S. exchange, Bittrex shut down its U.S. operations in early 2023, citing regulatory uncertainty.

It later filed for bankruptcy after being hit with SEC charges for operating an unregistered securities exchange.

Many users were unable to withdraw funds in time (me!!) and are still awaiting outcomes from bankruptcy proceedings.

Its shutdown was largely attributed to a challenging regulatory environment in the US, rather than a sudden hack or Ponzi scheme.

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Bottom line: Only keep coins on exchanges if you're okay with losing them forever.

I keep my coins in self custody using a ColdCard wallet.

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