Why CZ Says Self-Custody Is Riskier Than Centralized Exchanges?
Binance founder Changpeng Zhao (CZ) stated exchanges are statistically safer than self-custody, citing new Bitcoin (BTC) loss information from analyst Willy Woo.
Woo shared figures from River’s 2025 business report on Monday, exhibiting 1.57 million BTC misplaced by means of self-custody in contrast with 1.51 million BTC misplaced on exchanges. The hole sits beneath 60,000 BTC.
Why CZ Says Exchange Hacks Look Worse Than They Are
Zhao argued the comparability misses how all sides studies losses. Exchange hacks generate main headlines. Hence, reporters and researchers observe them intently. Self-custody losses, nevertheless, hardly ever attain the identical visibility.
Lost personal keys, forgotten passwords, and destroyed {hardware} wallets usually go unreported. As a consequence, Zhao recommended the self-custody determine seemingly understates the true scale of losses.
He additionally famous that some exchange-side losses come from platforms that now not function. BitMEX, as an illustration, announced its shutdown in July, closing an 11-year run. Meanwhile, industry hack tracking shows incidents climbed roughly 50% within the first half of 2026, at the same time as complete stolen sums fell.
Binance’s SAFU Fund and the Self-Custody Comparison
Zhao pointed to Binance’s compensation apply as a key a part of his argument. The alternate, he stated, has constantly coated consumer losses tied to CEX-side breaches. Binance not too long ago expanded its Secure Asset Fund right into a $1 billion Bitcoin reserve.
Self-custody threat has drawn contemporary consideration this month. A Coldcard hardware wallet vulnerability drained BTC from customers in early August. One sufferer lost $1.6 million in minutes regardless of following customary safety steps. Zhao weighed in on that incident too, warning that no pockets setup ensures full safety.
Zhao stopped wanting recommending exchanges over personal wallets. Instead, he framed the selection as one in all threat tolerance and product match slightly than a easy security rating.
Whether Woo’s information holds up in opposition to additional scrutiny stays an open query. Self-custody losses are inherently more durable to confirm than alternate breaches. Bitcoin traded close to $60,347 on the time of writing, up roughly 1.2% over 24 hours.
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