Who this is for — Anyone on crypto or non-centrally-guaranteed venues. The platform can fail while strategy is fine.
Exchange risk is risk that the exchange counterparty compromises capital, execution, or continuity — hacks, insolvency, withdrawal freezes, API downtime, manipulation. Operational/counterparty risk to diversify actively, not accept passively.
In plain terms — Don't put all eggs in one exchange — FTX was the textbook case.
Professional oversight
| Criterion | What to evaluate |
|---|---|
| Track record | Incidents, hacks, historical freezes |
| Transparency | Proof of reserves, audits |
| Tech | API uptime, latency, anomalous spreads |
| Custody | On-exchange vs cold wallet split |
| Plan B | Secondary venue operational, rerouting |
Limit unnecessary on-exchange balance. Emergency procedures: withdraw, hedge, flat.
Weak signals
- Recurring withdrawal delays
- Anomalous spread/latency vs peers
- Opacity on incidents
- Excessive concentration on one venue
Pair with broker risk and operational risk.
Typical mistake — 100% capital on «convenient» exchange for low fees.
Example — Venue suspends withdrawals in vol spike. Plan: 40% already on exchange B + cold wallet — strategy continues.
Summary card
- Cap: max % capital per exchange.
- Review: quarterly due diligence.
- Drill: annual freeze simulation.
Gold path — Execution module. Index: Gold path.