CZ Puts Self-Custody Up Against Binance and Bitcoin Losses
CZ points to River data and says self-custody also comes with a lot of BTC losses because of lost keys and wallets. Binance also highlights its SAFU reserve and compensation policy.
Key Takeaways
- CZ says crypto exchanges are statistically safer than self-custody, based on new Bitcoin loss data from analyst Willy Woo.
- River’s research shows 1.57 million BTC lost through self-custody and 1.51 million BTC on exchanges, a gap of less than 60,000 BTC.
- Zhao points to Binance’s SAFU fund and says self-custody losses often stay hidden because of lost keys, passwords, or hardware wallets.
Binance founder Changpeng Zhao, better known as CZ, says crypto exchanges are statistically safer than self-custody. He pointed to fresh Bitcoin data from analyst Willy Woo, arguing that loss risk is not limited to exchanges and also affects users who manage their own wallet.
Losses on Both Sides
Woo shared the numbers on Monday from River’s 2025 industry report. The report says 1.57 million BTC have been lost through self-custody, while 1.51 million BTC have been lost on exchanges. That puts the difference at less than 60,000 BTC.
CZ says that comparison is often misunderstood. Exchange hacks tend to make headlines quickly, which means researchers and journalists keep a close eye on them. Self-custody losses, by contrast, are much easier to miss, often because of lost private keys, forgotten passwords, or broken hardware wallets. He also pointed to the recent Coldcard flaw, where a hardware wallet vulnerability led to hundreds of bitcoin disappearing in a short period.
Zhao said that likely means the self-custody figures understate the real scale of losses. He also noted that some exchange-side losses came from platforms that are no longer operating.
Binance Points to SAFU
A major part of his case is Binance’s compensation policy. Zhao said the exchange has often stepped in to cover user losses after breaches. Binance has also expanded its Secure Asset Fund into a Bitcoin reserve now worth $1 billion (€0.9 billion).
The wallet security debate got more attention this month after a vulnerability was found in a Coldcard hardware wallet. In that case, BTC vanished from users in a short time, even though they had followed standard security practices. Zhao also commented on the incident and said no wallet setup can offer complete protection.
Why This Matters
For European crypto users, the debate comes down to a basic question: how much control do you want to keep, and how much are you willing to trust a central party. Self-custody gives users full control over the private keys, but it also puts all of the responsibility on them. A crypto exchange, meanwhile, offers convenience and support, but customers still rely on the security and operational decisions of a third party.
CZ did not say exchanges are always better than private wallets. Instead, he framed the issue as a tradeoff between risk tolerance and how you plan to use your bitcoin. Bitcoin was trading around $60,347 (€52,300), about 1.2% higher than 24 hours earlier.
