What to Do When a Crypto Exchange is Hacked: A Guide for Investors

Cryptocurrency exchanges, while facilitating access to the lucrative world of digital assets, are unfortunately not immune to security breaches. The hacking of exchanges is a recurring issue within the cryptocurrency ecosystem, a risk that persists despite advancements in cybersecurity measures. It is crucial to acknowledge that exchanges serve primarily as platforms for transaction execution, not as secure long-term storage solutions for cryptocurrency holdings. Consequently, understanding the appropriate course of action in the event of an exchange hack is paramount for investors.

Upon news of an exchange compromise, a prevalent reaction among users is to withdraw their funds from the platform. This response is entirely understandable, driven by a surge of panic concerning the security of their invested assets. Many users subsequently opt to transfer their holdings to alternative exchanges perceived as possessing superior security protocols.

The foundational principle of “Not your keys, not your coins” remains unequivocally relevant. From the outset, advocating for self-custody, or the independent storage of one’s…