Changpeng Zhao: Exchange Custody and Self-Custody Both Carry Risks, Balanced Allocation May Be Safer

TechFlow news, August 4, Binance founder Changpeng Zhao stated that from a statistical perspective, storing crypto assets on exchanges may be safer than self-custody, provided that the relevant data is accurate. He pointed out that data on exchanges being hacked is easier to collect and publicize, while incidents of theft and loss in self-custody scenarios are often not fully disclosed, therefore statistical results may be biased.

Zhao also stated that some defunct exchanges have dragged down the overall industry data, while Binance and a few other exchanges usually compensate for user losses in the event of centralized exchange security incidents. He emphasized that there are no absolute advantages or disadvantages between exchange custody and self-custody, as the two differ in risk characteristics and product functions and are suitable for different types of users; adopting a balanced allocation may be a more suitable approach.