.cz_binance gives an important advice to users who keep their funds on centralized exchanges
A flurry of large transactions toward an exchange is the first sign of active liquidation of the exchange's external holdings. Technically, cryptocurrency exchanges should not move users' funds outside of the platform's ecosystem since it creates liquidity risks.
Once an exchange's liquidity falls below a certain point, an unexpected spike in withdrawals will most likely cause a situation similar to FTX's. After a few failed withdrawals, panic in the community emerges and the liquidity crisis spiral accelerates, causing a congestion on the network and a complete halting of withdrawals.To avoid scenarios described above, users should keep a close eye on operations in exchange-related wallets.
If you are willing to minimize exposure to the aforementioned risks, the safest way to do so is to move funds away from a centralized exchange to your own non-custodial wallet. By holding funds in your own wallet with your own private keys, you will avoid situations like the
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