What Happens if Binance Goes Out of Business?
Will Binance fail?
Due to the outstanding performance and leadership of CEO ChangPeng Zhao, Binance is currently one of the biggest exchanges in the cryptocurrency space, with them making hundreds of millions every year even in bear markets. Binance is even bigger than Coinbase itself, due to Binance supporting most countries.
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While Binance is highly unlikely to fail due to its position and all the money they’re making, always remember that a catastrophic exchange hack could easily kill its entire business — and also, let’s hope that Binance doesn’t pull off something fraudulent like what Sam Bankman-Fried did with FTX.
What Happens if Binance Dies?
It will entirely depend on what causes Binance to go bankrupt in the first place.
If it’s the case that Binance shut down and goes bankrupt due to things like bad business handling or bad capital and finance management, there’s a decent chance that Binance would simply notify their users that their service is shutting down, while giving them ample amounts of time to withdraw their money.
On the other hand, if it’s the case that Binance goes bankrupt through a hack on their cold wallet storage, it’s a lot less likely for you to gain back access to your funds even if Binance has their insurance fund. Take note though, that your cryptocurrencies on Binance are not FDIC insured.
Is Binance safe?
Since Binance’s inception in 2017, Coinbase still hasn’t had a single devastating hack as of yet. Knowing that exchanges get hacked all the time, Binance being secure for 5+ solid years is a nice feat.
Binance CEO ChangPeng Zhao said it best: “funds are safu”.
But regardless — while we should hope for Binance to be hack-free, leaving all your cryptocurrency holdings on exchanges will likely end you up in a bad spot in the future. Great and easy-to-use hardware wallets with Bluetooth support have existed for a while now, hence there’s really no reason for anyone to not use a hardware wallet unless you don’t know how to navigate a computer or smartphone.
You should only leave funds on Binance or any exchange if:
- You actively trade
- Your planning on making a trade soon
To learn more about Binance’s security, you can refer to our article here.
Hardware wallets are mostly small flashdrive-like devices used for cryptocurrency enthusiasts to secure their funds. With a hardware wallet, you don’t need to worry about your phone or your computer getting hacked because your wallet’s keys are always secured inside the hardware wallet device.
How to protect your funds
As said multiple times earlier, exchanges get hacked all the time. To put it simply, only use exchanges such as Binance to buy and sell bitcoin and cryptocurrencies. It’s far better to store your funds through a reputable hardware wallet such as the Ledger Nano X. That way, you can make sure that your funds are totally secure, and that you will have access to your funds every single time.
Quick note: always purchase Ledger hardware wallets from the official website. Not on Amazon, eBay, etc. to prevent you from purchasing a fake/tampered device.
To learn more about Bitcoin and cryptocurrency wallets, you can refer to our in-depth guide here.
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