Trust in centralized cryptocurrency exchanges has eroded dramatically since 2022, with new survey data from Cointelegraph Research showing that 65% of users now trust exchanges less than they did four years ago. The findings, produced in collaboration with hardware wallet provider Trezor, highlight a decisive shift in investor behavior driven by a string of high-profile custodial failures.
The report, titled "The Future of Self-Custody: Turning Ownership Into Security," reveals that 45% of respondents say their trust has "significantly declined," while a further 20% describe it as "slightly declined." Only 16% report improved trust in centralized exchanges, with 19% seeing no meaningful change. The memory of the FTX collapse, which exposed an $8 billion deficit in customer funds in late 2022, remains a key psychological driver of this sentiment.
The survey points to three defining exchange disasters that shaped current attitudes: Mt. Gox's loss of approximately 850,000 BTC, QuadrigaCX's $169 million shortfall after its founder died as sole key holder, and the FTX collapse. Each followed a similar pattern where customers trusted a centralized entity that ultimately failed them.
As a result, 57% of surveyed users cite direct ownership of private keys as their primary motivation for choosing self-custody, indicating the move away from exchanges is becoming increasingly ideological rather than purely reactive. The report frames this migration as a form of risk management, as users recognize that custodial access can be restricted by decisions outside their control.
However, the shift to self-custody brings its own challenges. "Once assets move into self-custody, security no longer depends on institutional controls but on the user's operational discipline," the report notes. While hardware wallets reduce remote compromise risks, they don't eliminate losses caused by user error—such as losing seed phrases, sending funds to wrong addresses, or falling victim to phishing attacks.
The report concludes that turning ownership into security is not achieved through regulation, branding, or devices alone, but through behavioral practices involving disciplined device use and accurate understanding of what custody does and doesn't protect against.
