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3 Crucial Steps to Keep Bitcoin Safe After The FTX Collapse

  • By Localcoin
  • December 7, 2022
3 Crucial Steps to Keep Bitcoin Safe After FTX Collapse

The cause of the collapse

FTX was the second largest cryptocurrency exchange in the world after Binance. Users could use it to place trades, connect wallets, exchange digital currencies, and purchase non-fungible tokens.

Why did they collapse? In a nutshell, they invested more money than they had and the problems started to snowball.

How to store Bitcoin safely?

How to keep bitcoin safe?

  • Don’t leave your cryptocurrencies on exchanges - cryptocurrency exchanges pose more risk than traditional financial institutions or self-custody solutions.  While trading, exchange users must give ownership of their holdings to the exchange. Consequently, this poses a risk if exchanges are unable to meet the demands of customer withdrawals due to liquidity limitations or other extraordinary circumstances such as security breaches. 
  • Diversify locations of assets - diversifying your investment locations will allow you to prevent situations where the crash or collapse of the exchange translates into losing all the money. So, focus on self-custody solutions instead of keeping your funds on an exchange. They make it possible to reduce the risk of losing all the funds and allow you to easily access your coins.
  • Self-custody of your assets - Cryptocurrencies can be stored using self-custody solutions. They are a good option giving you full control over your cryptocurrencies. You do not have to worry about a third-party exchange going out of business, getting hacked, or losing access to your funds. 

Find out on our blog what is crypto staking.

Using A Bitcoin ATM

How to keep your bitcoin wallet safe? It’s better to rely on self-custody solutions, not on exchanges.

Localcoin advocates for self-custody as we do not hold any customer assets on our platform. All transactions are sent directly to the customers’ addresses instantly. Customers can manage their own funds independently after their purchase at a Bitcoin ATM. Localcoin has no access to any customer funds after the instant settlement that has occurred.

Want to learn how to buy Bitcoins using a Bitcoin ATM? Check out our tutorial.

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