Oh, look who’s back in the news! It’s Huobi, the exchange that just can’t seem to catch a break. Just when you thought things couldn’t get any worse, they’ve gone and pulled the plug on their multi-network wallet solution, the Huobi Cloud Wallet.
The Huobi cloud wallet, which tried staying relevant by rebranding to iToken in 2022, allowed users to keep their digital assets from 20 different blockchain networks without the need for private keys. This made it a popular choice for many crypto enthusiasts who appreciated the convenience of having all their tokens in one place. However, Huobi’s decision to end support for the wallet has left many of these users scrambling to find an alternative.
Huobi cited “strategic and product adjustments” as the reason for the closure, as if we don’t understand that they actually meant “cutting cost”, as the exchange has been struggling to maintain profitability against rival exchanges. Nevertheless, the lack of official announcements on either iToken’s or Huobi’s Twitter pages has left investors feeling confused and frustrated.
Users still holding tokens in their Huobi Cloud Wallet have been advised to transfer their funds back to their Huobi balance or withdraw them to self-custodial wallets that support the appropriate blockchains. Huobi has assured users that the withdrawal and transfer functions will continue to work for three months, with the official decommissioning date set for May 13, 2023.
Is self custody the answer?
Although the closure of the Huobi Cloud Wallet is not exactly a good look for the industry, it highlights the importance of choosing a reliable and secure wallet for storing your crypto. The crypto market is rife with centralized exchanges which are vulnerable to hacks, scams, and sudden changes in policy. Storing your crypto on a centralized exchange means you don’t actually own your private keys, putting your assets at risk.
This is why self-custody is the way to go. Storing your digital assets in a self-custodial wallet, whether it be a hardware wallet or software wallet like MetaMask or Keplr, means you own your private keys and, therefore, your crypto. In the crypto world, the popular phrase goes, “not your keys, not your coins”.
Of course, there are downsides to self-custody, such as losing your private key or having it stolen through phishing scams for example. Tragic as this may be, we call this “tuition fees”. Fortunately, with a little DEXual education, a dash of common sense, and some savvy security practices, self-custody is far more secure than storing your digital assets on a centralized exchange.
But hey, at least we now have another excuse to use our fancy hardware wallets and brag about how cool and tech-savvy we are.
At the end of the day…
Huobi’s struggles are not unique. Many other crypto exchanges have faced similar challenges, but that doesn’t make it any less entertaining to watch them flounder. As the market continues to mature and evolve, we’re likely to see more consolidation and shakeups in the industry. And who doesn’t love a good shakeup?
So, what’s the lesson here, folks? It’s simple: don’t put all your trust in one exchange or wallet solution. Take the time to learn about self-custodial solutions and how to do it safely. And if all else fails, just stick your money under your mattress (on a hardware wallet of course).
In conclusion, the closure of the Huobi Cloud Wallet is just another reminder of the challenges facing the crypto industry. But let’s not let that get us down, shall we? Let’s just sit back, relax, and enjoy the show. After all, it’s a wild west.