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> One institutional trader told The Wall Street Journal that his company has conducted fire drills to withdraw its assets from Binance quickly in the event of a

> One institutional trader told The Wall Street Journal that his company has conducted fire drills to withdraw its assets from Binance quickly in the event of a meltdown. If you think a crypto exchange you're doing business with is on shaky ground, the time to withdraw is now. So many crypto exchange collapses have shown that you need to withdraw before the "meltdown" if you want to ensure your assets are safe. If you wait you end up in bankruptcy purgatory for years and might only get a fraction of what you're owed.

kkielhofner 3y ago
> ensure your assets are safe It's been demonstrated time and time again this isn't practical. In crypto your choice is either worry about an exchange collapsing or worry about losing your keys, having your wallet cleaned out by some scammer, etc. The chances of either are very, very high. "Not your keys, not your coins" just as easily (or even more so) becomes "you don't have your keys" or "some scammer has your coins". Cue twitter and reddit posts from crypto enthusiasts saying "Oh you should have engraved your seed on steel plates and buried them under the birdbath in your backyard. Sorry you lost everything but hopefully you learned your lesson. Now buy more and try again!".
- wmf 3y ago
  At the institutional level I don't think this is true. There are pretty reliable custody options that are far less shady than Binance.
  - kkielhofner 3y ago
    > There are pretty reliable custody options When the best possible description someone can use is "pretty reliable" I think that underscores my point. FTX was considered to be in this category for years. Question now is, when will the next "pretty reliable" custodian go the way of FTX? When, not if. I've been following the space very closely for years and the shenanigans involving other people's money are unreal. Are you aware the former CTO of Kraken was completely anonymous? Literally an avatar - try to find their name anywhere. Kraken employees didn't even know who they were - never came to the office, events, or even turned their camera on in meetings. I would imagine someone in payroll/HR or something knew who they were but maybe not, and they were getting paid in crypto? Kraken, also considered one of the "more reliable" custodians for years, where the entire platform was in the hands of some random person who could disappear in the night with no reputational harm. Speaking of Kraken, take a look at their executive turnover. Very reliable. I wanted to believe in the underlying technology for years but it's fundamentally and inextricably linked to other people's finances and there has been plenty of time for this kind of clownish behavior to work itself out. Crypto is almost old enough to have a Driver's License in the US which makes it a senior citizen in technology terms. It has had plenty of time to grow up but I think it's clear it never will.
    - wmf 3y ago
      FTX was offshore. Gemini, Coinbase, Fireblocks, etc. are in the US. Kraken is on the fence IMO because it's US-based but pretty edgy.
    - tornato7 3y ago
      Fireblocks is the preferred custody solution for institutions today. It's 'non-custodial' and your assets can be recovered at any time. The MPC cryptography that enables Fireblocks to exist was only invented in 2019.
zzyzxd 3y ago
Well, as long as the exchange is not going down right now, there's still money to make and they will just keep trading. However, there's no reason to keep your assets on exchange if you are not actively trading them. I know many trading firms withdraw daily (or maybe even more frequent), and I would imagine the drills mentioned in the article are probably about withdrawing their assets before EOD.

kkielhofner 3y ago

> ensure your assets are safe It's been demonstrated time and time again this isn't practical. In crypto your choice is either worry about an exchange collapsing or worry about losing your keys, having your wallet cleaned out by some scammer, etc. The chances of either are very, very high. "Not your keys, not your coins" just as easily (or even more so) becomes "you don't have your keys" or "some scammer has your coins". Cue twitter and reddit posts from crypto enthusiasts saying "Oh you should have engraved your seed on steel plates and buried them under the birdbath in your backyard. Sorry you lost everything but hopefully you learned your lesson. Now buy more and try again!".

wmf 3y ago
At the institutional level I don't think this is true. There are pretty reliable custody options that are far less shady than Binance.
- kkielhofner 3y ago
  > There are pretty reliable custody options When the best possible description someone can use is "pretty reliable" I think that underscores my point. FTX was considered to be in this category for years. Question now is, when will the next "pretty reliable" custodian go the way of FTX? When, not if. I've been following the space very closely for years and the shenanigans involving other people's money are unreal. Are you aware the former CTO of Kraken was completely anonymous? Literally an avatar - try to find their name anywhere. Kraken employees didn't even know who they were - never came to the office, events, or even turned their camera on in meetings. I would imagine someone in payroll/HR or something knew who they were but maybe not, and they were getting paid in crypto? Kraken, also considered one of the "more reliable" custodians for years, where the entire platform was in the hands of some random person who could disappear in the night with no reputational harm. Speaking of Kraken, take a look at their executive turnover. Very reliable. I wanted to believe in the underlying technology for years but it's fundamentally and inextricably linked to other people's finances and there has been plenty of time for this kind of clownish behavior to work itself out. Crypto is almost old enough to have a Driver's License in the US which makes it a senior citizen in technology terms. It has had plenty of time to grow up but I think it's clear it never will.
  - wmf 3y ago
    FTX was offshore. Gemini, Coinbase, Fireblocks, etc. are in the US. Kraken is on the fence IMO because it's US-based but pretty edgy.
  - tornato7 3y ago
    Fireblocks is the preferred custody solution for institutions today. It's 'non-custodial' and your assets can be recovered at any time. The MPC cryptography that enables Fireblocks to exist was only invented in 2019.

zzyzxd 3y ago

Well, as long as the exchange is not going down right now, there's still money to make and they will just keep trading. However, there's no reason to keep your assets on exchange if you are not actively trading them. I know many trading firms withdraw daily (or maybe even more frequent), and I would imagine the drills mentioned in the article are probably about withdrawing their assets before EOD.