The Worst Centralized Exchanges

In the past two weeks, two long-standing centralized exchanges announced shutdowns, and more could follow. Cédric Beau shares the five warning signs he watches for, his own prediction for the next casualty, and why self-custody remains the only real protection for long-term crypto holdings.

A Painful Wave of Closures

Last week, BitMEX announced it would close after a decade of operation. This week, BitMart said it would shut down progressively after seven years. And next week, we might see another one. I have a personal history with both of these exchanges, and I have met their founders. Arthur, the founder of BitMEX, is a friend of a friend. I met him several times and even attended his private parties. Sheldon, from BitMart, I met in Las Vegas not long ago, and speaking Chinese helped us connect. BitMEX was the first exchange to offer 100x leverage back in 2018 or 2019. Arthur once told me they had done a trillion dollars in trading volume thanks to that product. BitMEX is set to close at the end of September, while BitMart plans a phased shutdown by January 31 next year. HTX is also restricting access for some users, and I will no longer be able to work with them starting next month. These are not Binance, but they are pillars of crypto history, and seeing them fall hurts.

Five Red Flags I Watch For

After watching Mt. Gox, FTX, and several Chinese exchanges collapse over the years, I have learned to spot the signs. Here are five things that tell me an exchange is in trouble.

No recent proof of reserves or audits, and vague answers when the community asks. If a platform refuses to prove the money is there, it probably is not.
Massive marketing pushes with extreme leverage or unsustainable APRs, like 100% on small deposits for a few days. If it sounds too good to be true, like UST before the Luna collapse, and withdrawals are also delayed for existing users, something is wrong.
Regulators are circling: recent fines, investigations, and announcements about leaving the US or EU to focus on 'emerging markets' like Africa or the Philippines. That usually means they are running from regulation, not toward growth.
A wave of frozen accounts and blocked withdrawals, often justified as compliance or anti-money laundering. I have seen cases of $600,000 or $3 million frozen. Most of the time it is not about terrorism; it is about holding onto funds to keep liquidity.
Trading volume is falling, but the exchange is spending heavily on ads, influencers, and user acquisition campaigns. They want to rinse one last wave of new deposits before shutting down. BitMart was still running a big promo the day before announcing closure.

My Prediction: MEXC

My personal pick for the next exchange to fail is MEXC. I said the same last year, and I still think so. Yesterday, July 30, Cecilia, the face they hired after a bad PR period, was let go. That removes the public face at a time when MEXC already shows at least two of the warning signs I listed: frozen accounts, withdrawal complaints, and heavy marketing. I do not use many centralized exchanges myself, so I could be missing others. But MEXC does not smell good to me.

Centralized Exchanges Are Just Banks

A centralized exchange is exactly like a bank. Your balance is just a number in their database. They hold the private keys, not you. As long as that is true, there is always risk: a hack, a legal freeze, founders running away, or even a war. Bitcoin was created to remove third parties and let people truly own their money. Over the years we rebuilt a system that looks a lot like the old one, just with a different wrapper. Today exchanges offer deposits, lending, staking, and payments like Binance Pay. That is everything a bank does, with a nicer user experience. When something goes wrong, users always pay the price, while the exchange and its founders protect themselves first.

My Own Experience with Frozen Funds

I have had funds blocked on centralized exchanges myself. I also ran an import-export business before crypto, and Stripe froze my money for weeks during Covid. HSBC once could not locate my transfer for 15 days. There is no real difference between HSBC, Stripe, FTX, or MEXC. Sometimes it is a few days, sometimes weeks. The reasons vary, but the result is the same: your money is no longer under your control. These experiences made one thing clear to me. No matter how big, regulated, or professional a platform looks, a centralized exchange should never be the place for your long-term money.

The Real Solution: Self-Custody

The solution has been written on the first page of the Bitcoin white paper: hold your own private keys. I keep the majority of my long-term crypto on cold wallets. I send only a small amount to an exchange when I need to trade, and I remove it as soon as the trade is done. Self-custody is a bit more work. You need to buy a cold wallet, memorize passwords, and back up your seed phrase somewhere safe. Never take a photo of it, never store it in the cloud. For larger amounts, you can add multisig or split funds across multiple cold wallets from different brands. If you follow these basics, it is manageable.

I know it can feel scary to be fully responsible. People worry about losing keys or making a mistake. But the alternative, leaving funds on an exchange, is far more dangerous in the long run. The phrase 'not your keys, not your coins' is a practical rule that protects you. Every time I travel or work in this industry, the worst losses I see are from people who left their assets on centralized exchanges.

Take Action Now

I expect more centralized exchanges to fail in 2026. My opinion is humble but usually correct. Whether that happens this year or not, you can get ahead of it. Pause this video, move the majority of your long-term crypto to a cold wallet, and stop waiting for the next collapse to regret it. The longer you wait, the greater the risk. If you have already done it, tell me in the comments so I know this video helped at least one or two people.

The Bottom Line

Centralized exchanges have their uses: short-term trading, swapping, on-ramp and off-ramp. I still use them for that. But they are tools, not vaults. The recent closures of BitMEX and BitMart are a reminder that no platform is 100% safe. The only way to truly own your crypto is to hold your private keys yourself. Take responsibility, set up self-custody, and stop treating exchanges like banks.