@binance CEO Suggests #cryptocurrency Exchanges Are Safer Than Keeping One’s Keys https://t.co/rSLyCOxona via @cointelegraph — Vasi ₿utuc 📈 (@just_vasi) January 21, 2020
Many hardcore crypto ogs advocate storing your own keys. But the truth is, today most people are not able to secure a key even from themselves (losing it). A trusted centralized exchange is #SAFUer for most people. The numbers speak for themselves. Need to work on wallets. https://t.co/bsX3Ea5WCD — CZ Binance (@cz_binance) January 19, 2020
However, CZ explained that he believes in a centralized exchange to be a safer option for most people. One Twitter user noted that the suggestion is particularly bad coming from CZ, given that the platform has previously been hacked.
This is a really Bad take. Specially because Binance have been hacked in the past. Remember the roll up, @cz_binance — Javier Bastardo 🏴☠️ (@criptobastardo) January 19, 2020
It has been analyzed that in early May 2019, Binance experienced a major security breach resulting in the theft of 7,000 BTC, equivalent to over $40.7 million at the time.
On the other hand, Vitalik Buterin, the co-founder of Ethereum, disagreed with the idea that users should be responsible for safekeeping their keys and the system’s designer has no responsibility to avoid loss of funds caused by key mismanagement.
“Disappointed at people replying to this with ‘crypto is what it is, it’s your job to be super-careful and write down backup seeds in three places.’ We can and should create better wallet tech to make security easier.”
Buterin mentioned the idea of “social recovery,” a system that would allow multiple people one trusts to use their keys in combination to enable the recovery of funds.
However, one commentator noted that social recovery systems have serious drawbacks, given that it makes multiple people targets to possible attacks.
Additionally, social recovery requires a certain degree of trust for the people involved in the process.
Likewise, the prevalent immutability of the ledgers that manage most crypto assets is a big draw for many hackers, more so than traditional bank accounts. A bank transfer can be reversed while a cryptocurrency transaction in most cases cannot be, and thus the cybercriminal gets to keep their ill-gotten proceeds.
Thus, it has been analyzed that bad actors trying to steal crypto assets are increasing their efforts.