Crypto Exchange Failures: What Happens to Your Funds
The collapse of a cryptocurrency exchange can leave customers wondering what happens to their funds. The outcome depends on how customer assets were legally characterized, held, and identified during the exchange's failure. This is why evaluating exchange-failure risk requires considering multiple layers: custody structure, segregation, proof of reserves, legal terms, and any additional financial backstops.
Bitget is a notable example because its various mechanisms are transparently visible. The exchange publishes monthly updates on its Proof of Reserves (PoR), reporting a 135% total reserve ratio across 19 covered assets in September 2026. This update was the 46th since December 2022.
Bitget also maintains a separate Protection Fund, with an average valuation of $382 million in August 2026 and supported by 5,500 BTC. However, it's essential to note that PoR does not guarantee a particular bankruptcy outcome on its own. Rather, it provides users with information about reserve backing, custody choices, and available protection resources.