Cyber attacks and hacking are two of the most common security threats facing cryptocurrency exchanges. According to Immunefi, in May 2024, hackers and fraud cost over $52,000,000. Decentralized Finance (DeFi), the most popular target, was also the one with the highest number of exploits. CeFi had no major attacks in May 2024.
It is crucial to find a platform that allows you to securely trade digital assets. The regulatory environment is complex, so it’s important to use exchanges with a high level of regulation.
In this article, we'll highlight the safest crypto exchanges. From understanding key security features to choosing the best-regulated exchanges, you'll gain the knowledge to protect your crypto and trade with confidence.
Before we begin, you'd do well to check out our article highlighting the best crypto exchanges.
The Factors You Should Consider Before Choosing A Safe Crypto Exchange
It is important to ensure the safety of your digital assets when choosing a crypto-exchange. Consider these factors:
Regulation of Licensing
When selecting a crypto-exchange, it is important to first check if the exchange has been regulated. Consider regulation to be your superhero’s shield protecting you from any potential dangers.
- The Benefits of using a regulated exchange: Regulations ensure that your funds are better protected. It's like having the Avengers guarding your assets, ensuring they are safe and secure. Exchanges that are regulated are less likely than others to commit fraud and more likely to assist you in the event of a problem.
- Crypto Exchanges are regulated by the following key regulatory bodies: Search for exchanges that are regulated by well-respected organizations such as the SEC in the U.S. or the FCA in the U.K. These organisations set financial rules, which ensure that exchanges are fair and transparent.
- How to Verify an Exchange's Regulatory Status: The website for the exchange will usually have regulatory information, which is often available in its FAQs. “About” You can also find out more about “Legal” section. Additionally, official listings and third-party evaluations from regulatory bodies may help verify an exchange’s legitimacy. This step is akin to doing your homework before buying a new gadget; it helps ensure you're getting something reliable.
Security Features
Prioritise crypto exchanges with strong security features when evaluating them.
- Two-Factor Authentication (2FA): The vault is now secured with an additional lock. Not only does it require your password, but also another form of confirmation like a text message sent to your mobile phone. It makes it much more difficult for unauthorized users to gain access.
- Safe Storage of User Money (Cold Storage Vs. Hot Wallets: Most of the money is kept offline in cold storage. Hot wallets are online and more secure, but they are also less accessible. As Batman balances his duties of Bruce Wayne with the Dark Knight in Batman: The Dark Knight, an exchange that is good will have both.
- Other Security Features Add another layer to security by looking for features such as IP Whitelisting. Regular security audits are also essential, ensuring that the exchange's security measures are always up-to-date. A few exchanges provide security alerts that notify you of suspicious or unauthorised activities on your account.
Rent Insurance
The insurance aspect is often overlooked by crypto exchanges, but it can prove to be life-saving if anything goes wrong.
Insurance is available for certain types of loss, such as hacking and fraud. The same way that your car insurance covers you against theft and damage, this is how exchanges work. Insurance provides peace ofmind, as you know that in the case of an unplanned event your assets will still be protected.
Insurance generally covers damages caused by breaches in security, like hacking. However, the coverage details can vary, so it's crucial to understand what is included.
Crypto Exchange Insurance: Limitations
There may be limits on how much is insured. An insurance policy may only pay up to a specific amount for each incident. To understand how much coverage you have, always read the small print. It's also helpful to check if the exchange has a dedicated insurance fund, like Binance's Secure Asset Fund for Users (SAFU), which is specifically designed to protect users in case of major security breaches.
Reputation & Track Record
Research the reputation of an exchange and its track record before committing.
- It is important to have a positive experience and get reviews from users. Platforms with positive reviews and user experience are more trustworthy. The feedback of users can give valuable insight into the reliability and service provided by an exchange.
- How to Research an Exchange's History and Reputation: Search for feedback on review websites, forums and social media. If the exchange had significant security issues or problems in the past, check if they have been resolved. This step is like investigating a company's background before investing, ensuring you know its history. You should pay attention to the way in which previous issues were handled by the exchange. An effective, quick and transparent response could be an indication of how trustworthy it is.
- Red Flags To Watch Out For Watch out for exchanges where there are frequent complaints regarding security, customer service or withdrawal problems. These warning signals are red flags. Be wary of any exchanges with unusually high return rates or opaque business practices, as they can indicate scams and Ponzi schemes.
The conclusion of the article is:
You can choose a crypto-exchange that is safe by considering the factors above. This will help you make an informed choice, and ensure that your digital assets are protected, and you have confidence to trade. Additionally, it's beneficial to look at the exchange's offered features and services, such as support for various cryptocurrencies, ease of use, and fee structures.
This will not only ensure the platform meets your needs for security, but it also allows you to trade seamlessly. Last but not least, keep up with industry trends and news. As the crypto world is ever-changing, staying informed can help you make smarter decisions.
The Top Things to Consider for Different Users
When choosing a crypto exchange, it's essential to consider your trading experience and needs. Different types of users —beginners, experienced traders, and high-volume investors — each have unique requirements. You can use this section to find the exchange best suited for your style of trading and your security requirements.
Beginners
To those just starting out in cryptocurrency trading, user friendliness and educational resources should come first. Beginners should look for an exchange with a user-friendly interface, and comprehensive support.
- User-Friendly Interface: An intuitive and straightforward interface makes it easy for beginners to navigate trading’s complexities without getting overwhelmed. Easy-to-use exchanges such as Coinbase and Gemini simplify the buying, selling and management of crypto assets.
- Education Resources Find exchanges which offer extensive educational resources, such as articles, tutorials and webinars. Binance Academy is a great resource for helping new users learn about cryptocurrency trading and the basics.
- Customer Service: For beginners, reliable support from the customer is essential. Consider trading with exchanges offering a range of customer support channels including email, live chat and telephone support.
- Security Features Security should never be compromised for ease-of-use. Ensure that the exchange has implemented essential security features like Cold Storage and Two-Factor Authentication.
Expert Traders
Experienced traders need advanced features and tools to implement their trading strategies. These users need an exchange that offers both sophisticated functionality and flexibility.
- Advanced Trading Tools Search for an exchange that offers advanced charting, live market data and a variety of order types.
- Liquidity: It is important for traders with experience to have high liquidity in order to place large orders and avoid significant price fluctuations.
- API Access Trading bots and algorithms are often used by experienced traders to automate strategies. The APIs of exchanges allow traders to seamlessly integrate their trading bots with third-party tools.
- Tariff Structure For traders that make many transactions, it is important to find exchanges with competitive fees. Search for trading platforms with tiered fees that lower the fee for increased volume.
- Safety and Insurance Security is a priority for experienced traders who handle higher volumes. Make sure the exchange offers strong insurance and security protocols.
Investors with high-volume investments
The exchanges which cater to high volume investors (or whales) must offer them exceptional customer service, as well as high transaction limits and extra security features in order to safeguard their valuable assets.
- VIP Programs & Dedicated Support Some exchanges provide VIP accounts for traders who trade a lot. They offer lower fees and higher withdrawal limits as well as dedicated account managers.
- Maximum transaction limits: Exchanges with large deposit and withdrawal limits are not suitable for high-volume investors.
- Additional Security Measures Security is paramount for investors who deal with large amounts of cryptocurrency. Exchanges offering multi-signature Wallets, whitelists for withdrawals, insurance against theft, or hacking, are the best to choose.
- Trade Solutions that are Customizable: Investors with high volumes of trade may need bespoke solutions or OTC services.
- Regulation Compliance Investors who invest in large volumes need to ensure that the exchange adheres to regulatory standards. This will protect them from any legal risk.
Safe Crypto Exchanges
Selecting a trustworthy and safe cryptocurrency exchange is the first step to ensuring your digital assets are secure. CER.live assessed the crypto exchange’s security for this part of the article.
According to the CER, here are some of safest cryptocurrency exchanges.
WhiteBIT
WhiteBIT was founded in 2018 in Lithuania. It has an excellent security score. This exchange has advanced security features, such as continuous security testing, bug bounties programs, and extensive user security protocols. WhiteBIT provides transparency by providing proof of funds. It also offers insurance on digital assets.
Bitget
Bitget puts security first with features including two-factor verification (2FA), antiphishing codes and cold wallets for the bulk of users’ funds. It also performs regular audits of security and uses advanced risk management protocol to ensure a safe trading environment.
Coinbase Exchange
Coinbase’s user-friendly interface is renowned for its top-notch safety. For 98% of the user’s funds, Coinbase uses biometrics and 2FA. Coinbase provides coverage against specific types of loss and regularly conducts audits to verify its trustworthiness.
Binance
Binance’s stringent security is a hallmark of the exchange, which ranks as the biggest cryptocurrency trading platform by volume. This includes 2FA, Cold Storage, and a Secure Asset Fund for Users(SAFU) in order to protect money in the event of security breaches.
Binance’s robust security is further enhanced by regular security audits, bug bounty programs and its participation in these programs.
Kraken
Kraken has a reputation for having rigorous security measures. The exchange uses 2FA and advanced encryption. They also conduct regular audits of their security. Kraken offers insurance for digital assets stored in cold-storage, which makes it a good choice when looking to trade securely.
BitDelta
BitDelta’s security features are highly rated, including 2FA, Cold Storage, and regular Security Audits. This exchange is constantly improving its security to ensure user funds are protected. It demonstrates a commitment to protecting assets.
Crypto.com Exchange
Crypto.com was founded in Malta in 2019 and is registered there. Its comprehensive security measures are a source of pride. They include MFA, cold storage of most funds and security audits. Crypto.com is certified to ISO/IEC 27001 and PCIv3.2.1 level 1 by several organizations.
There is also a Bug Bounty Program through HackerOne and Insurance to cover specific types of loss, which adds another layer of protection.
CER.live Security Ratings
It is important for users to understand and verify the ratings of the exchanges listed above. CER.live offers the latest ratings of security and reports on various crypto exchanges. CER.live allows you to stay up-to-date on security issues and take informed decisions by using the latest information.
These exchanges were evaluated using a methodology that included over 20 security factors, including server security and user security. It also considered penetration testing, bug bounties, insurance of funds, as well as security for users. You can increase the security of your digital assets by choosing to use one of these exchanges.
Your Crypto Holdings Secured on Exchange
It’s important to continue protecting your digital assets after you have chosen a safe crypto exchange. Here are some tips to secure your crypto assets effectively.
- How to Create Strong Passwords with a Password Manager You should use a password that is strong to protect yourself from unauthorized access. Create a password that is unique by using a combination of lowercase and uppercase letters, special characters, and numbers. A password manager is a great way to generate complex passwords.
- How to avoid suspicious links and phishing attempts: Phishing attacks are often disguised as fake messages or emails that trick you into divulging your login information. Avoid clicking on any unknown links or unsolicited communication.
- Do not deposit funds from unreliable sources: To reduce fraud and scams, only use funds that come from trusted sources. Money laundering and legal problems can arise if you deposit funds from unreliable or unknown sources.
- If You Are Thinking About Withdrawing Your Funds into a Personal Account: Consider withdrawing your funds into a personal account for added security. This is especially true if you do not trade actively. Hardware wallets for cryptocurrency, like hardware wallets that store funds in a secure location, are a great way to increase security.
- Update Software and Hardware Regularly: It is vital to keep your devices and software updated. Security vulnerabilities can be patched in updates.
- What You Should Know and How to Stay Informed To protect your cryptocurrency, you must stay informed. Join online forums, participate in discussion groups, and follow reputable sources of news to keep up with the latest security threats.
Understanding What Happens If a Cryptocurrency Exchange Is Hacked
Hacks may still happen despite all precautions. It is important to know what will happen if your crypto exchange has been hacked, and the measures that are taken to safeguard your money. To lessen the effect of incidents like this, many top exchanges listed on CER.live offer insurance plans and emergency plans. These can give you peace of mind.
In the event of a cyber-attack, most exchanges freeze withdrawals and transactions to avoid further loss. They then conduct an investigation, working often with cyber experts and the law enforcement. Insurance exchanges may reimburse users for losses, depending upon the insurance policy’s terms.
Closed thoughts on Safest Crypto-Exchanges
To successfully navigate the crypto-world, it is important to select a secure exchange and take proactive measures to protect your assets.
Compliance with regulatory standards, such as those set forth by the SEC or FCA, ensures protection and transparency. Understanding the difference between decentralized (DEX) and centralized exchanges (CEX) is crucial—DEXs offer more privacy, while CEXs provide stronger security and support.
Many crypto exchanges don’t have FDIC coverage, but they often do. It is important to stay informed on the latest trends in security and use resources such as CER.live, which provides updated security ratings.
Do your research and plan your journey carefully.
FAQs
What are the characteristics of a secure crypto exchange?
Two-factor authentication is a strong security measure that a safe crypto exchange uses to keep most of its money off the internet. “cold storage,” Regular security checks and insurance policies. They can help prevent your money being hacked or stolen.
How do I choose a safe crypto exchange if I'm a beginner?
Start with an easy-to-use exchange and one that offers good security if you are new to cryptocurrency trading. You can start with Coinbase or Kraken because they offer educational tools and have strong security measures.
Do crypto exchanges have insurance like banks do?
The FDIC does not insure crypto exchanges like it does banks. Some exchanges, however, have insurance policies that cover loss from hacks. Verify the insurance policies offered by your selected exchange.
What can I do when a crypto-exchange is hacked?
In the event that a crypto exchange gets hacked there should be a plan in place to handle it. Insurance is available from many top exchanges to cover hacking losses. Be aware of the security procedures at your exchange. Consider moving any funds you don’t use to an individual wallet.
How do I secure my crypto-holdings on an exchange site?
Use a strong, unique password, enable 2-factor authentication, avoid clicking suspicious links and use your personal wallet to add extra security. Staying up to date on the latest safety practices is another way to keep your crypto safe.
What are the safest crypto exchanges available?
CER.live has rated Crypto.com and Kraken as some of the best crypto exchanges. Binance is also a top choice. The security features of these exchanges, such as two-factor authentication and cold storage are highly rated.