“Not your keys, not your coins” is a well known saying that is somewhat of a staple in the crypto world. Even those unfamiliar with the world of cryptocurrencies would know it or some variation of the message it tries to convey. It refers to the fact that if your crypto assets are stored on an exchange with a different entity, a third-party custodian, you might not have a guarantee of access to that crypto asset when the time for you to claim it comes.
Quadriga: The cryptocurrency exchange that lost $135m
https://www.bbc.com/news/world-us-canada-47203706
In the early years when the cryptocurrency world started, it wasn’t a safe place for just anyone to go and invest it. To go, put in their hard-earned funds with complete faith that they would reap profits at the end of the day. Apart from this, there were lots of Exit Scams around during the early days of the crypto world.
What is an Exit Scam?
This refers to a practice done fraudulently by cryptocurrency promoters that lack ethics who disappear with the funds provided by investors after the Initial Coin Offering.
How do they work you might ask? These promoters launch a brand new cryptocurrency, it might be real at the start but these promoters have other plans for the end of it. Then their ICO raises funds from various different investors. This business could run for a short period. After the funds collected for the ICO has been completed, the promoters vanish. This would leave the investors aghast and in the dark. Looking for these promoters most times would not yield results.
Because the crypto world is anonymous, decentralized, and free of regulations, it is very hard to track these scammers that collect the ICO funds after the scam has been done.
Exit scams frustrated the cryptocurrency world as it started up. But it is now maturing to be a safe place and a safe world to invest your funds
Saving Crypto Assets in an Exchange
This year only, there have been about seven high profile exchange hacks in the cryptocurrency world. These are reasons people in the cryptocurrency world are cautious.
Lots of people want Bitcoin owned by other people. What happens if the exchange doesn’t go well or the accounts get frozen by one of these regulators?
One of the serious problems these days has been storing private keys. Lots of users have been finding it hard to keep their keys in safe places. Apart from that, others would like to steal these keys. If that happens, lots of crypto assets would be lost
Fear, Uncertainty and Doubt
Doubt and fear creeping up about Cryptocurrencies and its world is understandable, but these days the crypto space is becoming better by the day and you need to make sure you transact with members of the crypto world you are used to, or those you trust to prevent sad stories.
Recent polling has shown that it is important for your crypto assets to be kept in personal wallets which you have full control and management of, with this, robberies and scams would keep reducing until it becomes a thing of the past.
A more recent survey revealed that there are now 68.42 million blockchain wallet users (Blockchain.com, 2021). The number of blockchain wallet users is expected to further grow this 2021 as mobile accessibility improves rapidly.
