Six in Ten Crypto Users No Longer Trust the Exchanges Holding Their Money

Confidence in centralized exchanges has eroded sharply since 2022, with new survey data showing the majority of crypto investors have pulled back their trust following a string of high-profile custodial failures.

The findings put fresh momentum behind a years-old warning that has never fully left the conversation: not your keys, not your coins.

A survey by Cointelegraph Research found that 65% of users trust exchanges less than they did four years ago. Of that group, the damage runs deep. Forty-five percent say their trust has significantly declined, while a further 20% describe it as slightly declined. Only 16% of respondents say their trust in centralized exchanges has improved, and 19% report no meaningful change. Separately, 57% of those surveyed cite direct ownership of private keys as their primary motivation for choosing self-custody, suggesting the move away from exchanges is not purely reactive but increasingly ideological.

The Failures That Made This Inevitable

The numbers do not exist in a vacuum. Cointelegraph Research points to three events that defined how the industry arrived here. Mt. Gox lost approximately 850,000 BTC in a collapse that remained the defining exchange disaster for nearly a decade. QuadrigaCX left customers facing a shortfall of around $169 million after its founder died as the sole holder of private keys. FTX, the most recent and most damaging, exposed an approximately $8 billion deficit in customer funds in late 2022, triggering a crisis of confidence that the industry has not fully recovered from.

Each failure followed a similar pattern: customers trusted a centralized entity with their assets, and that entity failed them. The cumulative effect is visible in the survey data, with the 2022 FTX collapse appearing to mark the clearest inflection point in how users think about custody.

Self-Custody Is Growing, But So Are the Risks

The shift toward self-custody is a direct response to these events. When investors hold their own private keys, no exchange insolvency, mismanagement, or fraud can directly claim their assets. The appeal is straightforward. The responsibility that comes with it is less discussed.

Cointelegraph Research frames the open question plainly: as more investors move assets off exchanges, does the crypto industry fully understand the responsibilities that come with self-custody? Losing a seed phrase, sending funds to the wrong address, or falling victim to a phishing attack are risks that no exchange safety net can absorb once a user has taken full control. The same sovereignty that protects against institutional failure also removes the safety layer that institutions, however imperfectly, once provided.

What the Numbers Leave Unanswered

The survey captures sentiment but leaves one tension unresolved. The 65% who trust exchanges less have presumably not all moved to self-custody. A portion of that group almost certainly continues to use exchanges out of convenience, limited alternatives, or unfamiliarity with hardware wallets and seed phrase management. Trust and behavior do not always move together, and the gap between what users say they believe and where they actually keep their funds may be wider than the data implies.

The 16% whose trust has improved are also worth noting. That figure likely reflects the emergence of more regulated, audited, and transparent exchange operations in the years since FTX, suggesting the industry has made some progress in rebuilding credibility even as the majority of users remain skeptical. Whether that progress is enough to reverse the broader trend is the question the next major exchange failure will ultimately answer.

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