Cardano

KuCoin Token

Huobi Token

Celsius

Cronos

FTX Token

GateToken

Uniswap

PancakeSwap

1inch

Coinbase Stock

<h2 id="header-0">Do you know if your money is safe?</h2><p>You probably know about what happened to Celsius and its users not so long ago and every crypto user now fears losing their assets in case of bankruptcy. Our team has contacted multiple crypto platforms, both CEX and DEX, and found out what will happen to your money in case the platform goes bankrupt. Keep reading.</p><p><em><u>We also created a youtube video based on this investigation, you can watch it <a href="https://youtu.be/LmxMVbG0FdE" rel="noopener noreferrer nofollow">here.</a></u></em></p><p>If you don’t know or are new to the crypto industry, here are some thoughts on Celsius’s crash. Celsius was one of the biggest players in the crypto industry. With a market cap of over 5.5 billion US dollars, Celsius has gone bankrupt and is currently facing multiple allegations. The most interesting thing about them is the fact that multiple lawsuits state that the company ran a Ponzi scheme.</p><p>A company going bankrupt is very awful. However, there are different tactics and policies that insure your invested money or even the cash you keep in the company. Here is a list of all the answers, categorised by their usefulness and positiveness. Make sure you know where you trade before investing tons of money into it!</p><h2 id="header-1">Negative or Uninformative Answers</h2><p>Altough we really just gave a simple question, some trading platforms weren’t as open as others. Here are some answers that didn’t provide any information regarding this topic or, on the contrary, provided some negative information that definitely needs to be seen by all crypto traders.</p><h3 id="coinbase">Coinbase</h3><p>Unfortunately, Coinbase is one of the many trading platforms that hasn’t fully answered our question. They have given us irrelevant information on how they have set up a team that helps their trustees in case of bankruptcy. No information on their plans in case their publicly traded company is going bankrupt. That’s a shame!</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ad56cd285c0c40ee9e56e255388ec497.png"><h3 id="kucoin">KuCoin</h3><p>This type of answer is the most interesting one. KuCoin just assured us that their platform is working fine and they don’t have any signs of bankruptcy we have to worry about. However, we think that this response indicates the fact that they don’t really have a plan for their bankruptcy.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/f376788fe207404c8b51bc3261c747e5.png"><h3 id="huobi">Huobi</h3><p>Nothing other than assuring their platform is safe and is running as usual we haven’t heard from Huobi. They talked about their inexistent liquidity crisis and other things, just not about what they will do in case of their bankruptcy. We can just speculate that they either don’t have a plan for that situation or the plan doesn’t involve giving your money and assets back.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/a9356051249d4adcbbc5d97b448748fd.png"><h3 id="gate-io">Gate.io</h3><p>Gate.io has assured us that their company is operating stably and doesn’t have any financial issues. Plus, they will protect their users’ assets as usual. However, we haven’t received any additional information on how they plan to do that and what will the compensation be in case of failure. We just got to trust them!</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/3493a22b67274cb6846be08bd0d78393.png"><h3 id="mexc">MEXC</h3><p>MEXC, using the same tactics as KuCoin, has assured us that their trading platform is doing alright and we have nothing to worry about. However, by giving us a link to their terms and condition page, they gave us a hint.</p><p>They don’t have a single paragraph that would indicate some actions in case of their bankruptcy. There is no documentation on this matter. Thus, we don’t have any information on where or how will your funds and assets be held in case of their bankruptcy.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/3f6adc9b79764c82b5d3971d38648cc0.png"><h3 id="bittrex">Bittrex</h3><p>Bittrex has assured us that their biggest priority is their customer’s assets’ safety. However, we have received no additional information on how they plan to ensure that safety and what will the situation be in case of their bankruptcy.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/fef4383bc0f14b88ad5c10afd254234d.png"><h3 id="bitfinex">Bitfinex</h3><p>Bitfinex, in their email, has confirmed the fact that your funds are used by the company for their own benefit and investments. However, they are not to be held responsible in case of any financial crisis, including bankruptcy, information leakage and other types of cyber-attacks.</p><p>We really think that their bankruptcy policy should be reviewed.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/a1e2255f521b4f899f89940b8ddae0c1.png"><h3 id="bitflyer">bitFlyer</h3><p>bitFlyer just told us that, in case of their bankruptcy, they will treat their customers’ assets according to the law. Although it is an uninformative response because not every person is proficient in terms of laws, their tactics are crystal clear. They will do just the bare minimum to not face legal allegations and multiple lawsuits, that’s all.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/2948069da18f43f1a6379fd35873ebcb.png"><h3 id="wirex">Wirex</h3><p>Wirex does hold their assets within Fireblocks, a custodian with up to $30m assets insurance. However, due to their enormous site and quantity of assets held there, we think that $30m is not a big enough insurance pocket for their customers. We can only speculate on this matter but, with just a $30m insurance pool, you’ll get something around 10 cents on a dollar in case of their bankruptcy.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/13a8247638dd4ae9acc7b86902cdc32a.png"><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/d769e139ee0e461f8638f1df7c5aabec.png"><h3 id="poloneix">Poloneix</h3><p>Poloneix has also given us an uninformative answer. Other than assuring us that their company works well enough, we haven’t received any information. However, they did say that, when such a financial crisis is to be faced, they will find a solution. We do hope that they will! Nevertheless, they should have a more detailed plan for that time.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ab5ec93daae8455b94bab4aed9ab4338.jpg"><h3 id="1inch">1inch</h3><p>1inch doesn’t have any information regarding this topic in their Terms and Condition. In addition to that, they didn’t answer our emails and, thus, we don’t have any information to share on their behalf. However, we can speculate that, due to the fact that we haven’t heard from them, there is no information at all about their plan in case of bankruptcy. Therefore, 1inch isn’t the safest trading platform to use.</p><h3 id="pancakeswap">Pancakeswap</h3><p>Pancakeswap, their Terms and Conditions, affirms that the site isn’t to be held responsible for all types of losses that a client has ever had. Thus, you aren’t insured and won’t be able to get your money back after a supposed bankruptcy. That being said, we think that Pancakeswap isn’t the safest trading platform out there.</p><h2 id="header-2">Positive or Informative Answers</h2><p>In this category, we gathered answers that we think are both informative and useful for a normal user. The companies listed there provided all the needed information in order to find out what will happen to your funds in case of their bankruptcy. Here you can find the screenshots of their emails and a quick analyse from our specialists.</p><h3 id="binance">Binance</h3><p>The absolute champion is Binance - one of the biggest, if not the biggest, trading platform for crypto. They have multiple policies regarding their plans in case of bankruptcy. Thus, you don’t have to worry about their bankruptcy in the first place. However, in case they do go bankrupt, there is insurance that covers the losses for most of the users.</p><h3 id="gemini">GEMINI</h3><p>Gemini chooses the insurance tactics. They are heavily insured on all fronts and, in case of bankruptcy, you’ll be given a fair share of your money held in their hot wallet. However, there are some nuances we should talk about.</p><p>First of all, the deposits that you make in US dollars are insured. You may think that it is fine. However, in case of bankruptcy or other financial crisis, you’ll get up to $250k, no more. Thus, if you had deposited more on Gemini, you can forget about that money.</p><p>Similar to that, other assets are insured and will be returned to you in case of bankruptcy. However, you won’t get the full amount. We don’t know exactly, it might be 50 cents to a dollar or just 25 cents to a dollar. That information wasn’t disclosed.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/879b7f12bd4744738e9907c1b1ed8ff6.png"><h3 id="phemex">PHEMEX</h3><p>PHEMEX and their customer support assured us that, in comparison to Celsius, in case of their bankruptcy, you’ll still be able to move your assets and funds. Thus, by having access to them, you’ll still be able to sell, move or keep them.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/96768ee49b6a497dac9d326d4acb94a6.png"><h3 id="bybit">BYBIT</h3><p>The same as with PHEMEX, BYBIT assured us that, in case of their bankruptcy, you’ll have access to your assets and funds. Therefore, you’ll be able to both sell or keep them in case of complete bankruptcy.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/2be1e862079d41b1b0c13f0aa8b89e0f.png"><h3 id="ftx">FTX</h3><p>FTX doesn’t have anything to do with your assets. They can’t and won’t be ever able to move or use them, thus, you’ll have access to them in case of bankruptcy or other financial crisis that is to occur in the future. Their position is quite similar to that of BYBIT and PHEMEX.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/c6c8fe4ac4614de4b3228266f20303bb.png"><h3 id="crypto-com">CRYPTO.COM</h3><p>Crypto.com has also chosen insurance tactics. They have a new insurance policy that holds over $750m of total cryptocurrency in both direct and indirect custodians coverage. On top of that, crypto.com is currently holding one of the biggest direct insurance policies, over $100m in cold crypto assets. In over words, you are pretty safe using crypto.com.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/30cea42fa2db40b7ab4deec8277efc98.png"><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/4dc469c7b5ef4b4893f3eeb85afef42b.png"><h3 id="kraken">KRAKEN</h3><p>Kraken didn’t give us an informative answer. They just gave us some general information. However, they did point out the fact that, as a $20 billion USD company, they keep their operational funds away from their clients’ funds. Thus, we can assume that, by keeping operational and non-operational funds in different holdings, Kraken is safe in case of bankruptcy.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/1d65e6e43e3a41fb8c7fbc3ee2c38094.jpg"><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ecf0a58debc34948a26fb6576ffabfc6.jpg"><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/20f022f360d246048baafa71c15baa5a.jpg"><h3 id="uniswap">UNISWAP</h3><p>According to their response, Uniswap doesn’t control any of your assets and, in case of bankruptcy of Uniswap Labs, their protocol will still be able to function and get you access to your funds and assets.</p><p>Thus, you’ll still be able to swap your assets and funds, sell them or get them in another storage even after the bankruptcy of Uniswap Labs.</p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ff4db855c12d41c9ace37c266301e588.png"><h2 id="header-3">How to Avoid Losing your Money in Case of Bankruptcy</h2><p>To be clear, if the site or the company you keep your money on has already gone bankrupt, you won’t be able to get your money or at least the full sum. However, there are some pro tips that will keep you away from such situations long before the company will announce its bankruptcy. Here is how pro traders do it!</p><h3 id="know-your-wallets">Know your Wallets</h3><p>To be in crypto is to be aware at every point of your career. Your assets will define your future wealth or misery. Thus, you need to take care of them. Our advice is to never use hot wallets to keep your crypto assets, especially if we are talking about tradings sites and platforms. By keeping your money on a trading platform, you give access to it and, sooner or later, in case of bankruptcy, you’ll never see that money again.</p><p>The best way to do it is to keep the bulk of your crypto on a cold wallet, a hard drive or something like that. Small parts of your portfolio can be kept on hot wallets for immediate trading or other manipulations with the money. This way, you’ll get the best of both worlds. The maximum security of cold wallets(just keep them in sight) and the flexibility and quickness of hot wallets and trading platforms. It’s that easy!</p><h3 id="know-the-early-signs">Know the early signs</h3><p>It’s really hard to monitor a company and really see the early signs of bankruptcy. However, if you make a living out of trading and crypto, it would be better for you to make sure your assets are safe. There are some signs that, in theory, can indicate an upcoming bankruptcy. Here are some of the most important ones of them:</p><ul><li>Continued decreases in cash flow</li><li>Low cash or capital balance</li><li>The departure of key management or employees</li><li>Inability to meet debt obligations such as loans and lease payments</li><li>Key debt covenants are or are soon to be breached</li><li>Difficulty meeting payroll</li><li>Increased interest rates on credit cards due to late payments</li></ul><p>Of course, you have no way to see their books and know about the cash flow, revenue and credits. However, you can observe the management, their behaviour and their junior’s behaviour. If an upper manager is leaving, it can mean a lot of things. However, if a pack of them is leaving, it can only indicate that the ship is going down. Also, you can keep in touch with a junior and get some inside information about their payroll and increased or decreased salaries.</p><h3 id="go-for-a-well-known-protocol">Go for a well-known protocol</h3><p>If you are a beginner and don’t really have any assets to protect, it is better to start with the easiest version possible. Going for the biggest, safest fish in the sea is the best thing you can do. That’s because the biggest companies and trading platforms have lots of insuring policies that will keep your money in place in different situations. Also, remember that they have a reputation to hold.</p><p>You can risk and go for a smaller company. However, statistics show that small companies are constantly drowning due to bad management or other such problems. We think that the safest option is to trade on a consecrated platform with millions of users.</p><h3 id="read-the-terms-and-conditions">Read the Terms and Conditions</h3><p>The best way to avoid losing money is to read the terms and conditions of every trading site you use. Rumours are that Celsius had an interesting paragraph in their terms and conditions. It said that “The money that you introduce in your account can be lost and we won’t consider them as your money”. This meant that, if they would’ve gone bankrupt, they won’t be held responsible for your money.</p><p>Thus, before registering and transferring large or even small amounts of money, read the Terms and Conditions attentively and, in case you aren’t positive with what they are saying, just choose another trading site.<br><br><strong>For more articles like this one, follow our Community profile <a href="https://coinmarketcap.com/community/profile/Satoshi_Club" rel="noopener noreferrer nofollow">here</a>.</strong></p><p><em>Disclaimer:</em></p><p><u><em>It is possible that we were misinformed or somehow misinterpreted the responses or the things said in the Terms and Conditions. That being said, Satoshi Club doesn’t give investment or any kind of advice, we just express our opinion on different public trading platforms. Take care and remember, invest what you can afford to lose and always DYOR!</em><br></u></p>

What Happens With Your Money When Crypto Platforms Go Bankrupt?

What Happens With Your Money When Crypto Platforms Go Bankrupt?

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