Are Exchanges Liable To Compensate In The Event Of Hack?

People generally think that their assets are completely safe on exchanges. That is not the case no matter how much renowned or reputed any exchange is because unless you take complete control of your assets, you can't really claim any third party for even your own property.

Recently i read the news about Bithumb exchange, which won the case and judge ruled in favor of exchange saying it is not responsible for compensating their Users. You can read the full news here.
Bithumb Wins Hack Case Court Battle; Judge Rules Crypto Exchanges are “Not Financial Institutions”

This is not the first time it has happened. Last year executives at Upbit exchange were indicted for Fraud by making bogus orders worth 254 trillion. Similarly Bitthumb was again under the radar for creating fake trade volume.
Executives at Korean Crypto Exchange UPbit Indicted for Fraud
Bitcoin Exchange Bithumb: Researchers Uncover Likely Fake Volume

This is just a glimpse of whole situation and reality is you can't really trust any third-party for your assets. You have to come up with your own strategy and plan to secure your assets to ensure security.

For instance you can start with doing following things:

• Never place your assets on any exchange for longer period of time
• Backup your private keys somewhere offline ( You can place them online but do ensure their encryption)
• Try to establish 2-3 layers of security for your main accounts including recovery methods

During last bull run, crypto market reached 800 Billion. No wonder its going to go beyond that next time and when that happens, exchange controversies are going to happen again on large scale. This time you should safeguard yourself before getting into hectic situation.

Posted using Partiko Android