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Is your crypto wallet at risk of being lost?

  • This week, MyCryptoWallet became the second cryptocurrency exchange in two months to collapse.
  • Blockchain Global went under in November owing investors A$21 million.
  • ‘Cold Wallets’ are the only secure way to store crypto until governments regulate digital currencies to protect customers.

This week, MyCryptoWallet became the second cryptocurrency exchange platform in Australia in the past two months to go bust. The four-year-old company boasted more than 20,000 users on the platform that allowed users to buy and sell cryptocurrencies including Bitcoin, Ethereum, Ripple and litecoin.

SV Partners have been called in as liquidators to wind up MyCryptoWallet following a long list of alleged complaints from users and further allegations of missing funds. In 2019 MyCryptoWallet’s accounts with NAB were frozen and just this year, ASIC was reportedly investigating complaints about the crypto exchange platform.

After news of the imminent liquidation, some users of MyCryptoWallet took to social media claiming A$40,000 worth of funds in their wallets on the platform had vanished, while others said they were unable to access any of their funds.

Just two months ago Blockchain Global, the parent company of Australian crypto exchange ACX, collapsed owing investors an estimated A$21 million. It appears MyCryptoWallet followed in the footsteps of Blockchain Global whichfroze the funds of users in all ACX accounts.

The strikingly similar fate of both crypto exchange platforms exposes the fundamental flaws in cryptocurrency exchanges from a consumer perspective; that unlike traditional banks which are governed by strict regulations and practices, there is no guarantee or security in the crypto world.

At this point in time the only way to be certain about the safety of your crypto is to take it off the exchange and place it in a ‘cold wallet’; a hardware device that keeps your cryptocurrency offline, according to the global leader, digital transformation practice at Norton Rose Fulbright, Nick Abrahams.

As more cryptocurrency exchange platforms bite the dust over time, and until governments around the world take action to govern the crypto world, crypto investors run the risk of losing everything with no insurance for the time being.

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