Paxful co-founder Ray Youssef’s post on X Binance Allegations that it confiscated the assets of Palestinian users were met with concern by many individuals and institutions in the sector.

In this case I think of Binance Whether it can seize users’ assets at any time the question came.

Isn’t it the hallmark of cryptocurrencies that they are decentralized? Why does Binance have the right to seize users’ assets?

Actually this problem one sentence There is an answer.

It is true that cryptocurrencies have a decentralized structure, but cryptocurrency exchanges like Binance It does not have this function.

To explain a bit more, while the main feature of cryptocurrencies is that they are decentralized, Binance and similar exchanges play an intermediary role in investors’ transactions. are intermediary institutions.

For this reason, even though cryptocurrencies are decentralized, cryptocurrency exchanges like Binance It is not decentralized. We can even say that in a sense they are centers themselves.

Centralized exchanges like Binance maintain control over the private keys that provide access to users’ crypto assets.

This situation theoretically means that the exchange allows users to do this have access to their accounts and even confiscate their property.

However, an action such as exchanging access to users’ accounts is usually not specified in user agreements. based on legal reasons occurs as.

In other words, under normal circumstances, Binance and similar exchanges They can’t block users’ accounts as they wish.

While the philosophy of cryptocurrencies is decentralization, exchanges like Binance do not actually fully adhere to this philosophy.

In fact, the most important feature of cryptocurrencies and the most fundamental problem they solve is due to their decentralized structure. without the need for any authority or third party making it possible to carry out transactions.

However, centralized exchanges like Binance store users’ assets and transaction information on their own servers. They create centrality.

Centralized exchanges are actually based on the philosophy of solving the problem of cryptocurrencies being tied to a center and intermediaries. they go wrong.

Due to their central location, they may face several issues including security concerns government regulations They can be subdued.

For this reason, cryptocurrency investors generally do not keep their assets in the exchange account.in cold wallets It is recommended to keep them.

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