The Importance of Backup Fund Systems on Crypto Exchanges: What Protection Does It Provide?

How are you all? I hope everyone is doing well, Today I will start with a bad news, the market has been very good for the past two days, Many big experts thought, Maybe Bitcoin will make its new ATH in this pump, but the market is upside down, yesterday Bybit Exchange was the victim of the biggest hacking in Crypto history, North Korean Hackers hacked $1.4B worth of Ethereum, and immediately transferred it, Then Bybit Exchange Ceo told their Twitter Page that they asked users to stay calm, and even after being hacked, they did not stop any kind of Withdrawal, And they said that they will give the entire hacked money from their Reserved Backup Fund to the users, Many thought that Bybit would be closed like FTX Exchange, Actually, what was hacked yesterday was 8% of Bybit's Backup Fund, Now if this incident had happened in a normal exchange, if they did not have Fund BackUp, then maybe those Exchanges would have lost money They used to declare bankruptcy due to lack of funds,

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There are many crypto exchanges now,

Many people think that the exchange account is hacked, so everyone keeps different types of security options enabled,

But in fact, when we deposit in different exchanges, each exchange deposits that fund in a specific account,

Then when we withdraw it, we transfer it from there,

So they have to be protected from important accounts with great difficulty, because if somehow their account is hacked, then all the users' funds will be hacked,

So we first have to see if the exchange keeps a backup fund reserve,

There are some big exchanges to keep the users' funds safe, for the added convenience of the users, each exchange keeps a fund reserve in a 1:1 ratio, such as Binance strictly provides its users' funds,

If a Binance user deposits $100 in their exchange, Binance keeps a $100 fund backup,

This is basically a Insurance Fund, which has been introduced to ensure the safety of users,

And the main reason behind doing this is that many times we notice that various exchanges are hacked, as a result of which the exchanges cannot give users funds, then they are declared bankrupt, although the exchanges have reserves, then they can easily return the funds to the users. Reserved and in the future they will not have to declare bankruptcy due to lack of exchange money,

However, there are exchanges like Binance that keep fund backup,

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1.Binance, 2.Coinbase, 3.Gemini, 4.Kraken, 5.Bitstamp, 6. Kucoin, 7.OKX, 8. Bybit etc.,

There are also many other exchanges that are of good quality, they basically keep backups in different steps to save the users' funds, so you should first check whether any exchange has a fund backup system,

So, avoid keeping funds in different exchanges just by looking at offers, "It is your responsibility to keep your funds safe" so choose a good exchange,

I hope everyone understands,

So I'm ending here today, everyone be well