Survey shows trust in CEXs keeps falling

TLDR

Recent survey data shows user trust in centralized crypto exchanges (CEXs) has dropped meaningfully since 2022, mainly due to hacks, collapses and regulatory fears.

1. Surveys find about 65% of crypto investors report lower trust in CEXs since 2022, with very few saying their confidence has improved.
2. Lower trust is changing behavior more than killing CEXs, with more assets moving to self-custody, DeFi and on-chain derivatives, while CEXs still dominate volumes.
3. The most important signals to watch are security records, proof of reserves quality and regulatory regime, which will determine which exchanges gain or lose users over time.

Deep Dive

1. What The Surveys Actually Say

A 2025 survey of 375 crypto investors reported that 45 percent trust CEXs less than in 2022 and another 20 percent see a slight decline, so 65 percent show reduced confidence, while only 16 percent report improved trust and 19 percent no change. The top reasons were exchange hacks and security breaches (33 percent), collapses of major platforms like FTX (27 percent) and regulatory restrictions that can freeze funds (26 percent) according to the same survey of Cointelegraph readers.

Follow up research similarly finds 45 percent of investors now trust centralized exchanges less than four years ago, with only a small minority reporting higher trust, reinforcing that this is a multi year perception shift, not a one off reaction.

2. How Users Are Adapting In Practice

Survey respondents report holding less on single custodial platforms, doing more due diligence on venues and increasing use of DeFi and on chain protocols for trading and yield. Concrete data backs this. On Binance, combined XRP deposit and withdrawal transactions have dropped sharply since mid 2025, with a persistent net withdrawal surplus that analysts interpret as users moving coins off exchange for private storage or longer term holding.

On the derivatives side, one study notes the ratio of DEX to CEX futures activity rose from about 6.34 percent to 21 percent during 2025, showing meaningful migration of leveraged trading to on chain perpetuals even as centralized venues remain larger. At the same time, Binance still handled about 4.9 trillion dollars of derivatives volume in Q1 2026, roughly 35 percent of the top 10 exchanges, and led spot trading with around 34 percent share, so CEXs remain the core liquidity hubs.

3. Security, Proof Of Reserves And Regulation

To repair trust, surveys highlight several expectations: regular independent proof of reserves audits, stronger cybersecurity, clear insurance coverage, transparent governance and closer engagement with regulators. Regulators are also pushing standards higher. In Japan, for example, the Financial Services Agency now requires exchanges to keep about 95 percent of customer assets in multisig cold storage, undergo third party penetration tests, maintain cybersecurity insurance and pass unannounced audits.

In the United States, the OCC is granting conditional national trust charters to selected crypto firms such as Coinbase and Crypto.com, putting their custody businesses under federal oversight that focuses on segregation and safekeeping of digital assets, even though these charters do not make them full banks. These moves aim to align crypto custody with traditional fiduciary standards, which could slowly rebuild institutional and retail confidence for exchanges that meet the bar.

Conclusion

Survey data confirms that trust in centralized exchanges has eroded since the last cycle, driven by security failures, platform collapses and worries about asset freezes. Users are not quitting CEXs, but they are reallocating, moving more activity to self-custody and on chain venues while still relying on CEX liquidity. The exchanges that combine deep markets with transparent reserves, strong security and credible regulation are best positioned if this trust reset continues.