Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases,
You don't have any seed phrase in a centralized exchange wallet, the exchange comtrols everything, that's why it is called a custodial wallet, and a strong reason why you should not store your funds in it for a long time.
If you notice your exchange wallet is hacked and the hacker is yet to change your password, then you should immediately change it, set up 2fa and other security measures. If the hacker is yet to withdraw all your funds, then you should either withdraw it to a different wallet, or disable withdrawal on your account if you have such feature available. Finally, inform the exchange as soon as possible and follow their instructions.