Among several considerations when picking a suitable crypto exchange, security and safety are of utmost importance to crypto traders and investors.
ADVERTISEMENT
Are Crypto Exchanges safe? How to choose an exchange you can trust
There is a big demand for high-quality, trusted cryptocurrency exchanges where people can buy and sell bitcoin and altcoins.
How to choose an exchange you can trust
Recommended articles
Crypto exchanges’ need for security is increasing over time. As more people get into crypto, protecting users is the most important goal for major platforms available in the market.
As the blockchain industry grows, the top crypto exchanges have implemented increasingly sophisticated security systems, like stringent identity verification and authentication measures, AI-based analysis, and collaborations with world-class cybersecurity firms. While security has improved significantly over the years, not all exchanges are created equal.
Aside from security, cryptocurrency users are looking for the right combination of available products and services, convenient user experience, and earning opportunities, among other factors.
ADVERTISEMENT
How do you find an exchange you can trust when there are hundreds of them currently vying for your attention? What are the criteria that make a trusted exchange?
Top Priority: Security
When it comes to selecting a crypto exchange to trust, security should always be the top factor to consider. From the minute you deposit fiat currency in your exchange wallet to the moment you start trading, every step of the process has to be secure.
At first glance, it may not be easy to assess a crypto platform’s level of security, but there are some things you can look out for. Your cryptocurrency is only as safe as the method you use to store it. Therefore, it's crucial to choose a partner you can trust and rely on — one that protects your private data and funds with the latest security standards, a professional security team and, ideally, a recovery fund as a cherry on top.
Security standards
ADVERTISEMENT
When looking at crypto exchange security standards, you should consider both the internet security standards and crypto standards. For a crypto exchange to pass internet security standards, it should have sufficient protections related to internet network access, including accounts, funds, points of contact, and more. The exchange should also have sufficient crypto-related protections, including the safekeeping of a user’s personal data, crypto wallets, and keys.
The best crypto exchanges in the world have the latest security standards for both internet and crypto. Their employees are constantly trained to prevent and counter breach or intrusion incidents. They undergo regular penetration testing and, in turn, educate their users on cyber-hygiene – be it safe internet use or suitable ways to access crypto tokens, blockchains, and projects. Have a read about general security principles and crypto security to better understand crypto security.
Safety of funds
Cryptocurrency markets are ripe with malicious actors and hackers looking for an opportunity to exploit exchanges and steal your funds. Exchanges are a popular target for hackers due to the large volume of money stored on them, and although hackers are rarely successful, it's safer to use an exchange that counts with a funds recovery plan or insurance plan.
Security Team
ADVERTISEMENT
The most important team at every crypto exchange is the security team. For this reason, many exchanges carefully protect the identity of their cybersecurity specialists to lessen the probability of hackers getting in touch with them and exploring potential vulnerabilities. Ideally, you want to register on an exchange with an active security team that regularly publishes reports and research analysis, and collaborates with other projects to improve the security of the entire crypto industry.
The best security teams proactively communicate with top-tier experts and companies through initiatives and alliances, inform the public about resolved security issues, and incentivize the crypto community to help discover and combat platform vulnerabilities.
User-protection security programs
Speaking of incentives and rewards, a proactive security team should always come up with contingency plans to address all potential weak points when it comes to using a crypto platform, from user education to insurance. This way, no matter what happens, users’ funds are protected and taken care of.
Popular and viable protection programs include regularly posting details on security updates and providing insurance funds and programs, such as the SAFU and BNB Pioneer Burn program, which respectively cover potential fund losses for users who suffered from account breaches or human errors in transmitting cryptocurrencies.
ADVERTISEMENT
Transparency
For a crypto exchange, threats aren't just external but also internal. The ideal exchange is transparent to its users from all points of view – clear terms and conditions, fee schedule, and transparent operations. The exchange should operate in an easy way for its users and stakeholders to observe how the funds are stored and protected. Transparency is extremely important for all exchanges, but twice as much for exchanges that also issue their own stablecoins. You can read more about transparency in stablecoins on Binance Academy.
In line with its ongoing commitment to transparency, Binance released its proof-of-reserves system to show assets held in custody and encourage all industry players to do the same.
User data protection and KYC enhancement
The first process you'll go through is registration, during which you will go through a know-your-customer (KYC) verification (i.e., identity verification). At a bare minimum, a trusted exchange should be able to protect the information you provide. But the best exchanges take the identity verification process very seriously and leverage this to proactively protect users and the crypto industry overall.
ADVERTISEMENT
Customer support & satisfaction
Bitcoin never sleeps. The cryptocurrency market is open 24/7, 365 days a year, non-stop. Eventually, you’re going to need some form of support. Check the customer satisfaction and customer support reviews for the exchange to see if you can count on their team when you experience some issue. If possible, look for an exchange that provides 24/7 support along with high response speed and resolution rate. Global exchanges also often provide support in different languages so should check if your preferred language is supported.
Conclusion
It’s not an easy task to find a crypto exchange that meets all the criteria and there are only a few that tick off all the boxes. But it’s worth the time to DYOR before you trust someone with your money. With the explosive growth of the crypto industry, crypto exchanges are going to the mainstream.
At Binance, we are committed to user security, ensuring all the items listed in this article play a crucial role in our day to day operations. In fact, for some items, Binance would be the only exchange that exhibits that particular trait.
ADVERTISEMENT
Disclaimer: Crypto assets are volatile products with a high risk of losing money quickly. Prices can fluctuate significantly on any given day. Due to these price fluctuations, your holdings may significantly increase or decrease in value at any given moment, which can result in a loss of all the capital you have invested in a transaction.
Therefore, you should not trade or invest money you cannot afford to lose. It is crucial that you fully understand the risks involved before deciding to trade with us in light of your financial resources, level of experience, and risk appetite. If required, you should seek advice from an independent financial advisor. The actual returns and losses experienced by you will vary depending on many factors, including, but not limited to, market behaviour, market movement, and your trade size. Past performance is not a guide to future performance. The value of your investments may go up or down. Learn more here.
Did you know: Binance Square recently introduced its unique monetization features that both users and creators can enjoy. There is a tipping option to reward creators for their content contributions, incentives for users through crypto boxes, as well as an affiliate commission program. More monetization features and product enhancements are planned for release within the near future, as Binance Square commits itself to building a robust social platform that is geared for the future.
#FeaturedBy: Binance Finance
JOIN OUR PULSE COMMUNITY!
ADVERTISEMENT
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.com.gh
Recommended articles
Glovo, Jumia, and 6 businesses that have exited the Ghanaian market
Yango implements new safety features to protect riders and partner drivers in Ghana
Ghanaians call for business-friendly environment, improved economy amid Glovo exit
Glovo to stop operating in Ghana effective May 10, cites profitability concerns
MoMo transactions reached GH¢1.9 trillion in 2023 due to Interoperability — Bawumia
7 factors to consider before investing in a money market fund
China dethrones USA as the most influential global power in Africa: Report
ByteDance prefers to shut down TikTok in US instead of selling it to American buyer
