Binance’s security
Binance’s cold storage – Binance holds majority their funds on their cold storage, hence majority of their funds are significantly harder to steal compared to the minority of their funds stored on their hot wallet.
Binance’s “SAFU” fund – Binance stores 10% of the trading fees they received on their emergency insurance fund, supposedly for them to hopefully be able to compensate their users if ever funds get stolen.
Is Binance Wallet Safe?
Yes and no. Binance is definitely one of those exchanges that are taking their security seriously, and because of that, Binance is a great platform to use for trading cryptocurrencies. With that said, no matter how secure an exchange is, they’re always a hot target for hackers. Hence, storing funds for long-term storage on Binance and any other exchange is a big no.
As always it’s far safer for you to store your funds on a non-custodial wallet; and preferably, a reputable hardware wallet like the Ledger Nano X. That way, even if every single exchange in existence gets hacked, your funds will remain untouched.
Why? Your accounts might not be as secure as you think.
While the exchange itself might be secure, your account might not be. On the 8th of May 2019, hackers have stolen $40 million worth of Bitcoin from the Binance exchange through “variety of techniques, including phishing, viruses and other attacks”, as said by ChangPeng “CZ” Zhao, Binance’s CEO, on their article publicized on the 7th of May 2019 . That should be enough for you to hopefully stop unnecessarily leaving funds on Binance or exchanges in general.
“Not your keys, not your bitcoin”
While this quote is directly referring to bitcoin, it should apply to pretty much every single cryptocurrency. Only use wallets whereas you have control over the private keys/recovery seed, as that way, even if the exchanges you use gets hacked, your coins doesn’t get lost along with it.
Another reason is that one of the main selling points of bitcoin is that it’s unconfiscatable. When you leave your funds on centralized exchanges, it defeats that purpose. Exchanges in general can lock up your account(s) regardless if you did something wrong or not. A lot of people think that this easily fixed by simply submitting a support ticket to the exchange, but in some cases it’s not. This occurrence has happened a lot more than most people think.
More info:
https://cryptosec.info/is-binance-safe/