If you know how to trade cryptocurrencies, you also know that you can’t trade them without a crypto exchange. A centralized exchange is like a bank that stores your money, except that it’s entirely digital.

Crypto exchanges can be centralized or decentralized. Centralized exchanges (CEX) like Binance let you create custodial wallets, which means you hand over control of your money to the exchange, so it’s the exchange’s responsibility to keep it secure. On decentralized exchanges (DEX), however, your private keys stay with you. You are in control of your wallet on DEXs.

Given that this can be complicated for new users, it’s worth knowing how important it is for you to secure your assets safely.

Appalling Facts About Exchanges

Since 2011, crypto assets worth $19.2 billion have been stolen. In 2021 alone, investors lost $2.99 billion in frauds and hacks, and statistics show that scams and hacks are growing at a rate of 41% per year. As the hype surrounding cryptocurrencies increases, new platforms and projects also launch, sometimes to the misfortune of users. While some are legitimate, others just open up to scam the investors and run off with the money.

Either way, a crypto exchange is an enticing target for a hacker since it stores billions of dollars worth of cryptocurrencies. To put things in perspective, on average, exchanges lose $2.7 million every single day. It always helps to have strong security measures that keep hackers at bay, but even then, it…