Learning from your mistakes is valuable, especially when it comes to this Crypto payment gateways without KYC and the broader crypto market, which is notoriously unforgiving of mistakes. We have compiled some non-obvious facts about cryptocurrency exchanges, payment platforms and trading systems that have resulted in the loss of thousands of Bitcoins and millions of dollars. You can definitely learn from these mistakes.
Disclaimer: Dangerous, do not try this at home.
Your money isn’t really yours
Do you have a seed phrase for your Exchange account? NO? Then you are not the actual owner of your assets. What can happen? Let’s look at the history of the Canadian cryptocurrency exchange. QuadrigaCX.
As of December 2018, the exchange had 363,000 registered users, of which 115,000 held assets worth a total of $190 million. On December 9, 2018, the platform’s founder, Gerald Cottendied suddenly and unexpectedly in an Indian hospital as a result of Crohn’s disease.
The tragic irony is that Gerald took access to most of them with him QuadrigaCXs cold wallets. The company filed for bankruptcy and all customer accounts were frozen. People lost access to their funds forever.
How could this have been avoided?
For long-term storage, use hot or cold wallets for which you have the starting phrase. Even if the wallet stops working, you can restore access using the mnemonic phrase.
Exchange servers can be confiscated
A cryptocurrency exchange client has no ability to install software on its own server. If the servers are seized by third parties, all information about cryptocurrency transfers and receipts become their property.
