Jun 1, 2025
5 min
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Why Move Your Crypto Away from Exchanges like Coinbase.
Exchanges can freeze funds or get hacked. Withdraw your crypto to a secure wallet and stay in control of your assets.
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The crypto space has its fair share of unpleasant surprises; most times, bad things happen.
Recently, on February 21, 2025, Bybit, a major cryptocurrency exchange, was hacked for $1.5 billion in what is considered the largest crypto heist ever. The attack compromised Bybit's wallet, leading to the theft of mostly Ether(ETH), which was swiftly moved through multiple wallets and liquidated on various platforms.
Bybit ETH multisig cold wallet just made a transfer to our warm wallet about 1 hr ago. It appears that this specific transaction was musked, all the signers saw the musked UI which showed the correct address and the URL was from @safe . However the signing message was to change…— Ben Zhou (@benbybit) February 21, 2025
The incident quickly caused a surge of withdrawals from Bybit, as users worried about the possibility of insolvency.
Why withdraw your cryptocurrency from exchanges?
Let's go over a few critical reasons for moving your funds out of custodial exchanges.
1. Security concerns
Keeping your coins on centralized exchanges exposes you to potential vulnerabilities. Hackers have often targeted centralized exchanges to drain users' funds.
No centralized exchange is truly safe, and no one can fully guarantee that your funds are safe. Coinbase—the most popular crypto exchange in the United States—said its users' crypto assets could become company property if it went bankrupt.
If something catastrophic happens to Coinbase, getting your crypto back will be practically impossible. Withdrawing your assets ensures you can keep them in a more secure environment, typically in a hardware wallet where you have control over the keys.
2. Exchange issues
Like any online platform, cryptocurrency exchanges can face technical problems, downtime, or other operational issues. If you need to access your funds urgently and the exchange is experiencing problems, you might miss out on favorable trades or lose life-changing amounts of money.
This is a common issue during major market movements. Users often complain that their wallet account pages are not loading or their transactions are not being processed.
When your digital assets are under your control, you can bypass any exchange-related issues, ensuring immediate access to your funds.
3. Marketplace control
During high market volatility, some exchanges may restrict withdrawals or trading activities. Headlines such as Binance halting BTC withdrawals and Crypto exchange BitForex halting withdrawals and stopping trading have become commonplace on our social media news feeds.
By holding your coins in a hardware wallet, you retain control over your assets, enabling you to respond promptly to market changes without being subject to any restrictions imposed by the crypto exchange.
4. Regulatory compliance
Cryptocurrency regulations are evolving, and they impact exchanges' operations. Most exchanges are forced to adapt to comply with new regulations, potentially disrupting their services.
Avoid becoming a victim of new crypto regulations. Ensure that your funds remain unaffected by any adjustments made by the exchange to comply with emerging legal requirements.
Coinbase user data breach in May 2025
In May 2025, Coinbase, the largest U.S.-based cryptocurrency exchange, disclosed a significant data breach affecting approximately 69,461 users.
The breach was traced back to December 26, 2024, but remained undetected until May 11, 2025, when the company received a $20 million ransom demand from cybercriminals. These attackers had bribed overseas customer support agents to access sensitive user data.
What data was compromised?
The stolen information included:
Full names
Email and postal addresses
Phone numbers
Images of government-issued IDs (e.g., passports, driver's licenses)
Partial Social Security numbers
Masked bank account details
Account balances and transaction histories.
Fortunately, no passwords, private keys, or direct access to customer funds were compromised.
Impact
The attackers used the stolen data to conduct targeted social engineering scams, impersonating Coinbase support to deceive users into transferring their cryptocurrency to fraudulent accounts. In response, Coinbase refused to pay the $20 million ransom and offered a $20 million bounty for information leading to the attackers' arrest.
Learn more about how an exchange hack impacts cold wallet users.
Recommendations
If you're a Coinbase user:
Monitor your accounts for suspicious activity
Be cautious of unsolicited communications claiming to be from Coinbase.
Utilize the free credit monitoring and identity theft protection services offered by Coinbase.
Move your crypto assets to a cold wallet like Tangem.
Security comparison: Tangem Wallet vs. Coinbase
We compare the security features offered by Tangem hardware wallets and centralized cryptocurrency exchanges (CEXs):
Feature | Tangem Wallet | Coinbase |
|---|---|---|
|
|
|
Custody Model | Self-custody: Users retain full control over their private keys, which are generated and stored securely within the wallet's secure element. | Custodial: Exchanges hold users' private keys and manage funds on their behalf, introducing third-party risk. |
Private Key Exposure | Never exposed: Private keys are generated offline and never leave the secure chip, ensuring they remain inaccessible even to Tangem. | Potentially vulnerable: Private keys are stored on exchange servers, which can be targets for cyberattacks. |
Hardware Security | EAL6+ certified chip: Uses a secure element chip with Common Criteria EAL6+ certification, providing high resistance against physical and logical attacks. | Varies: Security measures differ across exchanges; some implement robust protocols, while others may have weaker defenses. |
Internet Exposure | Offline storage: Operates as a cold wallet, keeping private keys and sensitive data offline, reducing exposure to online threats. | Online presence: Funds are often stored in hot wallets connected to the internet, increasing vulnerability to hacks. |
Authentication Methods | Biometric and access code: Supports biometric authentication and user-defined access codes for added security. | Multi-factor authentication (MFA): Commonly employs MFA, including passwords and one-time codes, to secure user accounts. |
Backup and Recovery | Multi-device setup: Offers a backup mechanism through additional cards, eliminating the need for seed phrases. | Recovery processes: Users may need to rely on exchange support for account recovery. |
Firmware Updates | Immutable firmware: No firmware updates post-manufacturing, reducing the risk of introducing vulnerabilities. | Regular updates: Exchanges frequently update their systems, which can introduce new vulnerabilities if not managed properly. |
Regulatory Compliance | User-controlled: As a self-custodial wallet, users are responsible for compliance with local regulations. | Mandatory compliance: Subject to KYC and AML regulations, requiring user identification and reporting. |
Risk of Hacks | Minimal: Offline storage and secure hardware significantly reduce the risk of hacking. | Higher: Centralized nature and online presence make exchanges attractive targets for hackers. |
Crypto management beyond exchanges
Exchanges do not provide complete control over your coins and tokens. Instead, they put you at risk
For even greater security, consider using a hardware wallet like the Tangem Wallet. With Tangem, you can store your coins in cold storage and easily buy, sell, and swap them.
How to withdraw your coins from a crypto exchange
Keeping your cryptocurrency safe is essential. The Tangem Wallet offers secure management and storage for your coins. Here’s a quick guide to transferring your coins from exchanges to your Tangem Wallet.
Find the deposit address in the Tangem app
Before you move your crypto, you must know where to send it.
Open the Tangem mobile app and tap on the cryptocurrency you want to move (like USDT on the Ethereum network). If you don't see the token, add it through Markets.
On the token's page, tap Receive.
Copy the wallet address (no memo is required in most cases).
The Tangem Wallet app's intuitive design helps you manage your cryptocurrencies and keep track of your portfolio address.
Moving your crypto to a hardware wallet
Moving your cryptocurrency to Tangem is simple:
Log in to your exchange account and go to the withdrawals section, which might be under transactions, balances, or wallet.
Select the cryptocurrency you want to withdraw, and choose the right network. For example, withdraw the USDT ERC20 token to the ERC20 address you copied from Tangem).
Paste your Tangem Wallet address or scan the QR code.
Confirm the transaction and complete any required authentication.
Each exchange has its own withdrawal procedures, so reviewing their instructions is a good idea.
Since the invention of gold coins and paper money, cryptocurrency presents an unprecedented chance to take control of your finances, free from outside influence. Embrace it by sticking to self-custody.
FAQ: Why move crypto from exchange to wallet?
Should you take your crypto off exchanges?
Yes. Keeping crypto on exchanges exposes you to hacking risks and platform failures. Self-custody with a secure wallet like Tangem gives you complete control and peace of mind.
Is it better to hold crypto in a wallet or an exchange?
Holding in a wallet is far better if you want security, ownership, and resistance to third-party risk. Tangem wallet makes self-custody easy and portable, without sacrificing safety.
Why move crypto from exchange to wallet?
To gain full ownership of your assets and remove reliance on centralized platforms.
Is it safe to leave crypto on the Coinbase exchange?
Coinbase is reputable but still centralized, making it a target for attacks and subject to regulations. For true safety, it's better to withdraw to a cold wallet. A cold wallet is better because you control the keys, not Coinbase. Tangem offers cold storage-level protection in a tap-to-use card or ring.
Does your crypto still grow in a wallet?
Yes, the value of your crypto still fluctuates based on market prices, no matter where it's stored.
Which crypto exchanges should you avoid?
Avoid lesser-known or unregulated exchanges with poor transparency or a history of freezing withdrawals. FTX's collapse is a clear reminder of centralized risk.
Where is the best place to keep your crypto?
In a secure, self-custodial wallet where you control the keys, like Tangem, it's offline, tamper-proof, and user-friendly.
Why should I keep crypto in a wallet?
Because only wallets give you actual ownership and immunity from third-party failure.
Should you move your crypto to a wallet?
Absolutely! For control, safety, and independence. Tangem makes that move easy and secure, even for beginners.
Does it cost money to move crypto from an exchange to a wallet?
Yes, you'll typically pay a network fee, which varies by blockchain. It’s a small price for gaining complete control and security with a hardware wallet.
What is the difference between a crypto wallet and an exchange wallet?
An exchange wallet is custodial—it holds your keys. A crypto wallet like Tangem is self-custodial because it gives you exclusive access to your private keys, meaning absolute ownership.
Is moving crypto from an exchange to a wallet taxable?
Generally, no. It's not a taxable event in most jurisdictions unless you're selling.
What happens to my crypto when I put it in a wallet?
Your crypto stays on the blockchain, but only you hold the keys to move it.
Does holding crypto increase value?
Holding alone doesn’t increase value; market performance does. But holding securely with Tangem ensures you keep what you earn.
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