Jimmy's Educational corner: CEXs and risk. There's a lot of fud around CEXs right now.
03 Jun 2023, 12:41
📝Jimmy’s Educational corner: CEXs and risk📝
There’s a lot of fud around CEXs right now. Everyone should always take appropriate risk assessment whether times are good or not.
✨What may be happing with the rumours of frozen withdraws 🤔
- If a lot of people are withdrawing from CEXs, there could be a delay as they need to get more liquidity for the sales. The cash in CEXs is sometimes stored in a place that will take some time to access. This is the same for banks if too many people try to withdraw at once.
- if you have a buy or a sell order at a price, and there are no buyers or sellers. The fund that you’re selling will be listed as “frozen”. The Cex market is essentially holding your fund until there is a buyer or seller to complete your order. If volume on a coin is low, there is a greater chance your funds will be frozen until the buy or sell order can be filled.
✨Risk assessment✨
If you’re concerned about have Loop on a cex, and you don’t want to pay the transfer tax. Access the risk and maybe only transfer 25-50% to a personal wallet. Too often crypto investor go “all in”, this is a flawed strategy and it overlooks other options.