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The collapse of Mt. Gox in 2014—where 850,000 Bitcoin (BTC) vanished—was supposed to be crypto’s ‘never again’ moment. The industry was built on the promise of financial sovereignty, yet a decade later, we’re still stuck at square one.
Bybit’s recent hack resulted in the loss of hundreds of millions—possibly up to $1.5 billion—in user funds, making it one of the largest crypto security breaches to date. While the exchange has continued operating, the attack exposes a deeper issue: crypto’s weakest list are centralized exchanges. Instead of eliminating single points of failure, the industry keeps rebuilding them, creating systems that are opaque, centralized, and fragile—on an increasingly larger scale.
Crypto was meant to free users from traditional financial institutions. Instead, most users are still trapped, reliant on centralized exchanges that control their funds. These platforms function like black boxes, vulnerable to insider manipulation, data breaches, and outright collapse—like banks, but without legal protections or regulatory oversight. And the system isn’t broken. It’s working exactly as designed—just not in users’ favor.
But if crypto was supposed to be an exit from traditional finance, why are we still relying on middlemen to hold our assets? If decentralization was the goal, why is trading activity concentrated in a handful of exchanges that function just like the banks crypto was meant to replace— with even fewer safeguards?
Crypto has rebuilt the financial prisons it was meant to destroy
The CEX model forces users to deposit funds into a centralized pool controlled by the exchange. Those funds are commingled, stored alongside sensitive customer data, and managed by a single entity.
This makes them perfect targets for hackers. It’s not a question of if an exchange will be compromised—it’s a question of when and how much users will lose next time.
For all of the crypto’s talk about decentralization, most trading still happens on centralized platforms that look and behave just like banks—except without deposit insurance, fraud protection, or oversight. If this model was unacceptable in traditional finance, why is it so common in crypto?
The justification for centralized exchanges has always been that they provide liquidity—that without them, crypto markets would be inefficient and fragmented.
But at what cost? Liquidity isn’t real if it vanishes the moment an exchange fails; markets aren’t open if a handful of insiders control prices. Ownership is meaningless if users can’t access their assets when they need them most.
After all, if your funds can be frozen, is that financial freedom? If your exchange can front-run your trades, is that an open market? If your assets disappear overnight in a hack, was that ever real ownership?
Bybit’s hack is yet another reminder that crypto’s biggest players benefit from centralization, not decentralization. The more power exchanges have, the more they can dictate fees, control access, and profit from their own liquidity pools.
It’s time to correct course
The next phase of crypto needs true ownership without barriers or intermediaries. If crypto is to survive, it can’t just be more decentralized. It needs to fundamentally change how assets, markets, and users interact.
That means liquidity that moves across chains, not locked inside CEX wallets. It means self-custody that doesn’t sacrifice usability, so users don’t have to choose between control and convenience. And it means markets where users—not insiders—control price discovery.
Right now, the industry is stuck in a loop. Every few years, another centralized platform collapses, wiping out billions in user funds. Each time, the cycle repeats because there is no viable exit from the system. If crypto is ever going to be a real alternative to traditional finance, it can’t rely on the same fragile, centralized infrastructure.
The only way out is to leave CEXs behind
The Bybit hack should be a wake-up call. But will it?
Centralized exchanges profit from keeping users trapped. They control liquidity, set arbitrary fees, and act as market makers in their own trading platforms. As long as that remains true, we’ll keep seeing the same failures again and again.
The answer isn’t another exchange, another centralized lending desk, or another rebranded DeFi platform that functions just like the institutions it claims to replace. The answer is building infrastructure where users don’t have to trust middlemen at all.
Crypto has a choice: build an actual exit or stay trapped in the same walled gardens until the next inevitable collapse. It’s time to start building.
