Adam Back Warns of Repeat Custody Failures: Separate Trading from Holding

Adam Back, the OG of Bitcoin, is calling out the industry for repeating the same catastrophic mistakes that sank Mt. Gox and FTX. His message is simple: stop letting exchanges hold your funds while they trade against you. This fundamental flaw, he argues, is a ticking time bomb waiting to detonate again. Back knows this pain firsthand, having lost coins in the Mt. Gox collapse after chasing a tiny arbitrage spread. The fallout from these failures lingers, with Mt. Gox creditors still seeing their trapped BTC move markets years later. FTX's creditors are also still getting paid back, a testament to the long shadow these events cast. The good news? Institutions are pushing for trilateral agreements, separating custody from trading. For retail, Back's advice is blunt: self-custody your long-term holdings and never borrow against your Bitcoin. Chasing quick gains with leverage is a liquidation trap, and timing the market is a fool's errand. He's seen 85% drawdowns and stayed cool, proving the power of the HODL strategy. The question remains: will exchanges fix their custody models before the next crisis, or will history repeat itself?