Learning from your mistakes is valuable, especially when it comes to crypto payment gateways without KYC and the broader crypto market, which, as known, doesn’t forgive errors. We’ve gathered some non-obvious facts about cryptocurrency exchanges, payment platforms, and trading systems that led to the loss of thousands of bitcoins and millions of dollars. These mistakes definitely offer something to learn from. Disclaimer: Dangerous, do not try at home. Your Money is Not Really Yours Do you have a seed phrase for your exchange account? No? Then you don’t actually own your assets. What can happen? Let’s look at the story of the Canadian cryptocurrency exchange, QuadrigaCX. – Advertisement -By December 2018, the exchange had 363,000 registered users, 115,000 of whom held assets worth a total of $190 million. On December 9, 2018, the founder of the platform, Gerald Cotten, suddenly and unexpectedly passed away from complications related to Crohn’s disease in an Indian hospital. The tragic irony is that Gerald took with him the access to most of QuadrigaCX’s cold wallets. The company declared bankruptcy, and all customer accounts were frozen. People lost access to their funds forever. How Could This Have Been Avoided? For long-term storage, use hot or cold wallets to which you have the seed phrase. Even if the wallet stops working, you can recover access using the mnemonic phrase.Exchange Servers Can Be Seized A cryptocurrency exchange client has no ability to install software on their own server. If the servers are seized by third parties, all information about cryptocurrency transfers and receipts will fall into their hands. This is exactly what happened in Germany in September 2024. Authorities seized equipment that was being used by 47 cryptocurrency exchanges, which claimed to be anonymous and untouchable. Naturally, all client data — IP addresses, account details, and transaction histories — ended up in the hands of law enforcement. When users attempted to access their usual exchange platforms, they were met with a threatening message stating that their last transaction had been recorded and they should expect an offline meeting with the police soon.- Advertisement -How to Maintain Privacy in Blockchain Transactions?To truly control your cryptocurrency and sensitive information, use non-custodial solutions where the software is installed on your server. This ensures that no one has access to your data.The Risk of AML Asset Freezes Do you know how “clean” the cryptocurrency in your wallet is? If you’ve never checked your coins for risk levels, any transaction could be your last. If an AML (Anti-Money Laundering) check flags a high-risk level, the exchange has the right to freeze your account and demand proof of the funds’ legality. Dealing with customer support can take weeks, and accounts are not always recoverable.How to Protect Your Assets from AML Freezes?Check the risk level of your cryptocurrency u
Ven. Gen 17th, 2025
