Binance founder Changpeng Zhao, widely known as CZ, said on Aug. 4 that, from a statistical point of view, storing crypto on exchanges may be safer than holding it in self-custody, assuming the underlying data is accurate. He said centralized exchange hacks are easier to track because they often become major news, while hacks, losses, and other incidents tied to self-custody frequently go unreported, making that data harder to collect. Zhao also noted that failed exchanges can distort the quality of exchange-related loss data. He added that Binance, along with some other exchanges, has historically provided user protections against hacks. At the same time, CZ stopped short of declaring one model superior, saying each comes with a different risk profile and product setup that may suit different users. He described a balanced approach as potentially the best option. Zhao was referring to a post from crypto analyst Willy Woo, which said 1.57 million BTC had been lost through self-custody, compared with 1.51 million BTC lost on exchanges.
Binance founder Changpeng Zhao, or CZ, said on Aug. 4 that, statistically, storing crypto on exchanges may be safer than self-custody.
Zhao said that view depends on the data being accurate. He added that his impression is that crypto analyst Willy Woo has long been a strong supporter of self-custody.
In explaining the comparison, CZ said hack data tied to centralized exchanges is easier to gather because those incidents usually become major news. By contrast, hacks, crypto losses, and similar incidents involving self-custody often go unreported, which makes the data harder to collect. He also said bankrupt exchanges can weigh on the quality of exchange-related data.
Zhao added that Binance, along with some other exchanges, has consistently provided protection for users against hacks. He did not say one approach is categorically better than the other. Instead, he said different methods carry different risk profiles and product services, and may fit different groups of users. A balanced approach, in his view, may be the best option.
A post from Willy Woo cited by CZ said 1.57 million BTC had been lost through self-custody, while 1.51 million BTC had been lost on exchanges.
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