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How to protect crypto in 2023, CZ Binance suggests after FTX hack

TLDR

  • The digital asset market is in another crash as the FTX crisis deepens.
  • Following the FTX hack, CZ Binance suggests ways to protect crypto.

Related: FTX hack, bankruptcy filing, and Solana Crash

The second-largest cryptocurrency exchange in the world, FTX, is in crisis, and this has caused the market for digital assets to plummet once more. Before moving further it’s important to understand FTX and what recently happened.

What is FTX?

FTX the leading centralized cryptocurrency exchange is known for its expertise in leveraged and derivatives products. Although FTX has its official headquarters in the Bahamas, it is controlled from the US, with its two largest offices being in Chicago and Miami. Sam Bankman-Fried, an MIT alumnus and former trader of international exchange-traded funds at Jane Street Capital, founded FTX in 2018. It provides a variety of trading products, such as derivatives, options, volatility products, and leveraged tokens. Because it processes most cryptocurrency trades globally, together with rival Binance, FTX is important and big.

What happened to FTX recently?

The collapsed cryptocurrency exchange, FTX, has been hacked and is at the center of a rapidly developing drama.

FTX hack

A few on-chain sleuths flocked to Twitter a few hours after the troubled company revealed it was declaring Chapter 11 bankruptcy to draw attention to several questionable outflows from the exchange to outside wallets. Over $400 million was transferred to addresses on the Ethereum, Solana, BNB Chain, and other crypto networks, however the entire extent of the damage is still unknown. FTX has been compromised. An admin going by Rey posted on the exchange’s official Telegram channel that all cash appeared to have vanished.

“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on the FTX website as it might download Trojans”

A few of the organization’s surviving employees were “investigating abnormalities with wallet movements,” according to Ryne Miller, the US’ general counsel, who replied to the event on Twitter early on Saturday. Later, he confirmed that team members had transferred assets from FTX and FTX.US to cold storage “to mitigate harm upon detecting unauthorized transactions.”

Investors are considering how to protect crypto assets after this horrible incident, which resulted in the collapse of the cryptocurrency exchange FTX and the FTX hack of $600 million worth of coins from its wallets. CZ Binance came to the rescue and suggested ways to protect crypto assets amidst the FTX hack.

CZ Binance advocates for cryptocurrency self-custody.

CZ Binance tweeted, “Self-custody is a fundamental human right. Use the company’s Trust Wallet to take ownership of your coins.

 Protect crypto, Keep crypto safe, FTX Hack, CZ Binance

After the tweet of CZ Binance, the TWT token from the Trust wallet rose to a record on Sunday. Following the FTX hack, investors believe it’s a great way to keep crypto safe. Many consider it the best way to answer the question of how to protect crypto from hackers.

The native token of the app, TWT, reached a record high when Changpeng “CZ” Zhao, CEO of renowned cryptocurrency exchange Binance, urged members of the crypto community to take personal ownership of their digital assets using Trust Wallet.

As investors reconsider how to protect their assets in the wake of the collapse of cryptocurrency exchange FTX and the following FTX hack that stole $600 million worth of coins from its wallets, Zhao is pushing for self-custody. Trust Wallet, which Binance purchased in 2018, is a decentralized hot wallet that makes it easier to store cryptocurrencies and non-fungible tokens. It works with various blockchains.

What is a Trust wallet Token?

The official token for the wallet is called Trust Wallet Token (TWT), and it enables owners to vote on app improvements and updates. According to statistics source Messari, the coin has increased by 80% in the last day to a record $2.3. Following the FTX hack, people are considering trust wallet tokens an ideal way to keep crypto safe.

According to Blockware Solutions’ market intelligence newsletter, which was released on Friday, “You have not purchased bitcoin until you receive it in a wallet for which you own the private keys.” You cannot rely on exchanges to have the bitcoin you paid for because of their repeated, irresponsible handling of customer cash, according to evidence.

To avoid mistakes that may be highly expensive, CZ Binance advised investors to start with small sums and become familiar with the technology. Trust Wallet allows the self-custody of cryptocurrency, according to Zhao. Zhao said in another tweet, “@TrustWallet your keys, your coins.”

Ilan Solot, co-head of digital assets at London-based Marex Solutions, stated in an email that “the ‘not your keys, not your money mantra rings truer than ever.”

Protect crypto, Keep crypto safe, FTX Hack, CZ Binance

Since the FTX hack, investors have been removing their coins from exchanges. According to data compiled by blockchain analytics company Nansen, Binance experienced a net outflow of more than $72 million early today, while Huobi and Crypto.com experienced outflows of $12.7 million and $7.3 million, respectively.

According to Glassnode data, the number of withdrawals from bitcoin exchanges has surged recently, showing a greater preference among investors for self-custody.

Self-custody is necessary to protect crypto

According to Microstrategy executive chairman Michael Saylor, self-custody is required to stop influential people from acquiring and abusing their position of authority. Given the state of the market, he also talked about the advantages of self-custody.

Self-custody, according to Saylor, prevents powerful actors from destabilizing the network and its users in addition to giving investors property rights:

The custodians “obtain an excessive amount of power and can subsequently misuse that authority in systems where self-custody is lacking.”

As a result, he said, “self-custody is useful for this wide middle class because it tends to produce […] this power of checks and balances on every other actor in the framework that makes them compete constantly for morality and transparency.”

Self-custody increases decentralization

Additionally, Saylor stated that as self-custody encourages decentralization, it is essential for maintaining the dependability and security of blockchains:

If a coin cannot be kept in self-custody, a decentralized network cannot be built.

A lot of traders and investors seem to have alreof ady turned to self-custody options as a result of the receself-sovereigntyook place last week.

According to on-chain monitoring company Glassnode, the number of Bitcoin withdrawals on controlled exchanges has risen to a 17-month high since the abrupt collapse of FTX in early November:

At the same time, net inflows into self-custody wallets have increased.

In the meantime, Bitcoin supporter Dan Held reminded his 642,800 Twitter followers that self-custody is a critical component to self-sovereignty while Blockchain Association head of policy Jake Chervinsky stated that One of the first things newcomers should learn is self-custody education:

Using cold storage to protect crypto

You should consider another option if the recent turmoil in the cryptocurrency market has you considering selling. By putting your digital assets offline and storing your cryptocurrency in a digital wallet, cold storage can preserve them. These digital wallets are less vulnerable to attacks because they aren’t online.

A wonderful illustration of why it makes sense to keep part or all of your bitcoin in cold storage is the recent FTX hack. If your cryptocurrency is stored on an exchange like FTX, you can only get access to those assets if the exchange can transfer your money to you. Your money can be lost if that exchange is compromised or is mismanaging the money.

Since you have to take several security precautions to access your money, the drawback of cold storage is that your assets are less liquid and more difficult to trade quickly.

Conclusion

Keeping crypto safe has become a major concern of investors. Because of recent events like the FTX hack, which has badly affected the digital market. Experts believe currently these two methods self-custody and cold storage are the best way possible to keep crypto safe.

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Disclaimer: This blog is for educational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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