As a poker player, it’s never fun to lose your entire stack in an all-in moment. However, unlike the recent scam-ridden scandal of FTX, at least you knew you knew you were gambling with your own bankroll. With the collapse of FTX, poker players looking to deposit and crypto users worldwide were left wondering if they were safe leaving their funds on a similar exchange. Many assumed they weren’t, as there were record exchange outflows following the FTX debacle. Exchange outflows are the number of assets withdrawn from exchanges to external sources such as cryptocurrency wallets. Despite the scandal surrounding FTX, keeping your funds on an exchange can be safe, and in this piece, we’ll outline some of the top exchange options for poker players. Let’s jump in.
Centralized Cryptocurrency Exchanges
The phrase “not your keys, not your crypto” rings more accurate than ever with the collapse of FTX. Still, many users prefer to keep their crypto on an exchange platform rather than on an external cryptocurrency wallet. While the latter is a much safer option, there are still centralized cryptocurrency exchanges you can (hopefully) trust not to be as (illegally) irresponsible with customer funds as FTX was. Below we’ve noted five exchanges and what makes them good options.
Besides being a publicly traded company under the ticker COIN, Coinbase has been in the crypto industry for over a decade. They also comply with US regulations and are US-based, whereas FTX was neither. USD held with Coinbase is insured with US banks, and crypto affected due to cybersecurity attacks is also guaranteed. There is no insurance for funds lost to mismanagement of your login credentials, though, as is typical with exchange insurance policies; your personal security failings are your own. Coinbase also stores the majority of user funds in cold storage, helping reduce their targetability for hacks.
While Binance hasn’t been in the industry for as long as Coinbase, they’re the largest exchange in the world by trading volume. They’ve been proponents of crypto adoption and development and were one of the first platforms to notice the issues FTX faced. In fact, their response was perhaps the catalyst in accelerating FTX’s collapse! While they don’t have fiat insurance, users’ crypto holdings are covered by Binance’s SAFU program, which will make all users whole in the event of a hack. They also store most user funds in cold storage like Coinbase.
Kraken, like Coinbase, has been around for over a decade. They are one of the most secure trading platforms, with bug bounties in place for users who can find any security issues. Perhaps the most important thing about Kraken is that they perform regular proof of reserve audits, which is being called for by many crypto regulators in the wake of FTX’s downfall. Apart from verifying the entire platform’s reserves, you, as an individual, can also check that the balances you hold on the platform are accurate. This regular audit helps ensure that your funds are safe.
Crypto.com has been buying up naming rights as much as FTX did. Its native token, Cronos (CRO), experienced a significant price drop in the wake of FTX’s fall, but this was due to fear of a similar incident happening on Crypto.com, and the asset has since bounced back. The difference between FTX Token (FTT) and Cronos is that CRO is an asset with an entire blockchain built around it, while FTT is (was?) simply a token created on Ethereum. This allowed FTT to be turned into a Ponzi scheme. Besides Cronos being a much more verifiable asset, Crypto.com has industry-leading security, with all fiat funds insured and all user funds held in offline storage.
Uphold is probably not the best choice of exchange if you are concerned about paying the least trading fees. Still, if you’re concerned with proof of reserves and exchange transparency, it’s a good one. Uphold offers a variety of crypto and traditional investment options, such as commodities, but more importantly, they post every single transaction that takes place on the platform. They also provide a live view of reserves, including assets in reserve and current obligations. So, if you’re looking for a transparent exchange to replace FTX, Uphold is a great choice.
Decentralized Crypto Exchanges
Decentralized crypto exchanges (DEXs) are an alternative to centralized ones. DEXs aren’t controlled by any single entity but instead run by code and smart contracts you interact with. Platforms such as Uniswap, Aave, and PancakeSwap are all DEXs you can connect your wallet to and interact with directly. There are generally ways to earn passive income on DEXs as well.
While the collapse of FTX wasn’t good for crypto, it may be a good push to get more crypto users to take security seriously. Whether that means choosing a transparent, centralized exchange or switching to the decentralized world of crypto, it’s a necessary step for the average crypto user.