TL; DR
Full story
The “news” part of this story isn’t all that exciting (actually, it’s kind of scary).
Here it is: Crypto exchange, Gemini, just sent an alert to their users asking them to monitor their accounts for unusual activity; and confirmed that around 15,000 of its customers could be affected by a data breach from its banking partner.
But this data breach is actually a perfect example of why it’s worth using a decentralized exchange (DEX) instead of a centralized exchange (CEX).
This is what we’re talking about…
Gemini is a CEX, which means it is run by a company and it is up to the company how they operate (which can be good, like Coinbase, or bad, like FTX).
On this occasion, Gemini worked with a banking partner to let people move their fiat currency on and off.
Providing people with a simple user experience to put dollars on an exchange, which they can then use to buy crypto, is one of them Good aspects of such close integration with a bank.
But the more integrations Gemini has, the more their users are exposed to potential hacks or vulnerabilities (like the 15,000 customers potentially affected).
What is the solution?
The solution is to take an approach that combines multiple decentralized experiences that are independent of each other while still providing a good user experience.
For example, you need to get your crypto into your wallet somehow, so it’s likely necessary to connect your fiat bank and your crypto wallet to an onboarding solution like MoonPay.
From there you can transfer your crypto to a DEX (i.e. a peer-to-peer crypto marketplace).
And voila! Your crypto is disconnected from any traditional banking system and your identity is safe.
Agree! Now you know it.