This is the continuation of a series of posts I've been making on the Terms of Service (ToS) of exchanges. See the TL;DR for the exchanges in the title, but also for Binance, Kraken, Coinbase, Crypto.com, OKX, MEXC, Gate.io, Huobi, Nexo and ByBit at the end.

After a judge has ruled that customer's assets do not belong to them based on the bankrupt-firm's ToS, I decided to check how deep we could go were one of the exchanges in the title to fail. I was looking specifically for insurance and/or ownership of the assets.

Why look for the ToS of dead exchanges?

I was interested in seeing what are the similarities of those failed exchanges' ToS with the CEX we have today.

FTX

Ownership acknowledged. No insurance.

8.2.6 All Digital Assets are held in your Account on the following basis:

(A) Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX Trading. As the owner of Digital Assets in your Account, you shall bear all risk of loss of such Digital Assets. FTX Trading shall have no liability for fluctuations in the fiat currency value of Digital Assets held in your Account.

(B) None of the Digital Assets in your Account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading.

(C) You control the Digital Assets held in your Account. At any time, subject to outages, downtime, and other applicable policies (including the Terms), you may withdraw your Digital Assets by sending them to a different blockchain address controlled by you or a third party.

Part (B) was broken by FTX itself, though: FTX Violated Its Own Terms of Service and Misused User Funds, Lawyers Say.

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8.3 Fiat currency

8.3.1 Where specified on the Site or in a Service Schedule, and depending on your location, the Platform may support various fiat currencies for deposit, withdrawal, and/or trading, using wire transfers, credit cards, or other appropriate methods.

8.3.2 Once we receive fiat currency that you load into your Account, we may issue you with an equivalent amount of electronic money ("E-Money"), denominated in the relevant fiat currency, which represents the fiat currency that you have loaded. This amount will be displayed in your Account.

8.3.3 E-MONEY IS NOT LEGAL TENDER. FTX TRADING IS NOT A DEPOSITORY INSTITUTION AND YOUR E-MONEY IS NOT A DEPOSIT OR INVESTMENT ACCOUNT. YOUR E-MONEY ACCOUNT IS NOT INSURED BY ANY PUBLIC OR PRIVATE DEPOSIT INSURANCE AGENCY.

[...]

2.10 No deposit protection

Neither Digital Assets nor any fiat currency or E-Money held in your Account is eligible for any public or private deposit insurance protection.

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Mt. Gox

There were no Terms of Service. By looking at their website on the Web Archive you can be depressed about the prices at the time, though:

Mt. Gox website on 16 Oct 2011

Fear not, thing was Norton secured lmaoo

Also $4 a coin. Ffs I wish I was there to buy some.

TL;DR

• None provided insurance against bankruptcy (at least not that I could find)
• Only FTX acknowledged one's ownership of assets (it was based on this that users could legally claim their assets, in addition to other laws and such)

TL;DR (Binance, Kraken, Coinbase, OKX, Crypto.com, MEXC, Gate.io, Nexo and Huobi)

• Kraken and Coinbase acknowledge that assets belong to users
• Binance does not say anything on ownership (at least not that I could find)
• I only found insurance information on Coinbase: all balance held in USD (fiat) is insured by default and up to $250,000, or up to $1M dollars for assets in fiat and crypto for Coinbase One users
• Crypto.com provides insurance up to $250,000 in the case of Unauthorized Transactions, subject to their opinion/take on whether it was really unauthorized or not
• OKX has a shady part where they reserve the right to deposit your money on their or a custodian's name. If they go bankrupt, you have no claim whatsoever.
• MEXC, Gate.io, Nexo and Huobi do not acknowledge ownership nor do they have insurance

Table TL;DR

??? = No explicit mention whatsoever

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Exchanges can change their ToS at anytime, so avoid leaving funds there for longer.

Use exchanges as exchanges. Buy a cold wallet and move your funds there. You're not protected from a downfall. See Mt. Gox's former customers: almost a decade later, no return of funds whatsoever.