Zhao Reignites Crypto Custody Debate with Exchange Security Thesis

Crypto custody has long been a contentious issue in the industry, and Binance founder Changpeng Zhao has reignited the debate by stating that exchange custody can sometimes be safer than self-custody.

Zhao argued on X that hacks involving self-custodied assets often go unreported, while exchange breaches are more visible and tend to become broader market events.

The discussion over where to store cryptocurrency is as old as the industry itself. Proponents of self-custody emphasize control and security, pointing to high-profile exchange failures such as Mt. Gox and FTX.

A significant portion of stolen funds in recent years came from individual wallets compromised through phishing, malware, or poor key management. These incidents rarely make headlines, whereas exchange hacks attract immediate attention and often trigger market-wide selloffs.