Honest Exercise: Are CEXs Honest and Can they Be TRUSTED?

Ever wonder if CEXs use our positions against us? I do. Ever look at the top 50 projects and scratch your head and ask why? How? What?!

Not only do CEXs like Binance and Coinbase make money off us through exchange fees, but what if they are actually using our positions and coins against us? What if the coins that they say we own aren’t real (fake paper crypto, as FTX had).

What if those “coins” aren’t really yours? What if it is just an abstract representation such as an “IOU”? In FTX’s case, many consumers are still owed crypto and funds and will likely never see either ever again.

Since Binance can’t pass an independent audit and it sounds like they are done doing business in Canada, have they been honest with us? Has Gemini? Has Coinbase? Has Kraken? Robinhood? You get the picture…

Why would they do that? Hypothesis: Psychological manipulation is easy - especially when it comes to finances. When you buy high, it is scary to watch it drop, so scary, that sometimes it’s easier to have mini breakdowns and sell at a massive loss JUST to get a little back.

For many of us who have been in this space, we become desensitized to the CEX fuckery. That’s fine, but how does the modern exchange function today?

If FTX taught us anything- “not your keys, not your coins” couldn’t ring more true today. Especially if Binance just closed their doors in Canada today. What is CZ up to?

And to any maximalist for any project, what not a better time to test the project/network to see if it is a good technological project? Has the project lied to you as well? How bad? I wonder this all the time. Let’s see what projects are the most exciting and actually perform!

This is not financial, investment, nor informational advice. As the exchanges tell me, they are not responsible for the news and publications that they frequently feature on their asset pages.

If this sounds bizarre, imagine how a company like Digital Currency Group can own Genesis, Grayscale, and CoinDesk. Fun reminder, Genesis withheld funds for an extended period of time for users participating in Gemini’s staking program - to the point where the Winklevoss twins (Gemini) and Barry Silbert (DCG) threatened lawsuits against one another on Twitter. If you defend them and say you should read the terms and services you’re missing the point.

What if they are lying to us and manipulating us to increase their bottom line while begging us to trust them?

What I’m trying to get at is simple - if you like crypto and if you own it, the best way to do that is through self custody. If you learn how to set up a wallet and withdraw the funds, you will truly own it and not be subjected to this financial war on the little guy.

The best regulations in the world can’t save us if the CEXs are wolves in sheep clothing that get to ultimately influence laws and policies.

This is not financial, investment, or informational advice. Since this is my opinion, I’m not responsible for the accuracy of any information within this post.

This post is a thought exercise and excellent reminder for businesses to be honest. That is just my opinion.

submitted by /u/abcxyzplease
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source https://www.reddit.com/r/btc/comments/13g01ax/honest_exercise_are_cexs_honest_and_can_they_be/