What are the risks associated with centralised crypto exchanges?

6 answers

• ritchie zhengJun 20, 2025 · a month ago
  Using centralised crypto exchanges can expose users to various risks. One of the main concerns is the possibility of hacking and theft. Since these exchanges store users' funds, they become attractive targets for hackers. If a centralised exchange gets hacked, users' funds can be stolen, resulting in significant financial losses. It is important for users to choose reputable exchanges with strong security measures to mitigate this risk.
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• Abhay JaiswalJun 11, 2021 · 4 years ago
  Another risk associated with centralised crypto exchanges is the lack of control over one's own funds. When users deposit their funds into an exchange, they essentially trust the exchange to hold and manage their assets. This means that if the exchange experiences any issues, such as bankruptcy or regulatory actions, users may face difficulties in accessing or withdrawing their funds. It is crucial for users to be aware of this risk and consider using hardware wallets or other secure storage options to have more control over their assets.
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• Copeland BaldwinJun 14, 2021 · 4 years ago
  At BYDFi, we believe that centralised exchanges pose significant risks to users. The centralised nature of these exchanges means that users have to trust a single entity with their funds and personal information. This creates a single point of failure and increases the risk of data breaches and hacks. Additionally, centralised exchanges often require users to go through a lengthy verification process, which can compromise their privacy. We recommend users to consider decentralised exchanges that offer more control and security over their funds.
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• Malik JameelJun 04, 2025 · 2 months ago
  When using centralised crypto exchanges, users also face the risk of market manipulation. Since these exchanges often have a large user base and high trading volumes, they can be susceptible to manipulative practices such as wash trading or spoofing. These activities can distort market prices and mislead traders. It is important for users to be cautious and conduct thorough research before trading on any exchange to avoid falling victim to market manipulation.
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• LiukangAug 23, 2024 · a year ago
  One more risk associated with centralised exchanges is the potential for regulatory crackdowns. Governments around the world are still figuring out how to regulate cryptocurrencies, and this uncertainty can lead to sudden regulatory actions against centralised exchanges. Such actions can result in frozen assets, restricted access, or even complete shutdown of the exchange. Users should be aware of the regulatory landscape in their jurisdiction and choose exchanges that comply with relevant regulations to minimize this risk.
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• Kowser AhmedFeb 01, 2023 · 2 years ago
  In conclusion, centralised crypto exchanges come with various risks, including hacking, lack of control over funds, market manipulation, and regulatory uncertainties. Users should carefully consider these risks and take appropriate measures to protect their assets, such as choosing reputable exchanges, using secure storage options, and staying informed about the regulatory environment.
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