As cryptocurrency exchanges are mostly centralized, they’re often attacked by hackers. According to an Exchange Security Report by ICORating, “over the past 8 years about 31 crypto exchanges have been hacked and more than 1 billion dollars (actually, $ 1.3bn) [sic] stolen.” Making matters worse, there is no refund process if cryptocurrencies are stolen. Some exchanges have insurance-backed funds, but not many.
There are now over 200 exchanges out there, and the number is quickly growing. But, as of this time, it’s impossible to guarantee the protection of assets on centralized platforms.
In spite of this lack of absolute security, some exchanges handle their assets much better than others. To calculate the best ones, ICORating judged exchanges based on the following metrics:
- Console errors: coding mistakes that could lead to vulnerability.
- User account security: passwords, 2FA, and e-mail verification.
- Registrar and domain security: weaknesses in the registrar and domain segments of the platform.
- Web protocols security: protection against various attacks.
Also, the group only examined exchanges with a daily trade value over one million USD. As a result, there are 100 exchanges on the report, sorted by a combined rating of the stats mentioned above.
Coinbase Pro Comes in at Number 1
Based on these statistics, Coinbase Pro scored the highest with an 89/100 overall. The U.S.-based exchange hit perfect scores in three of the four domains, falling only to a 3.5/5 in Registrar and Domain Security. Favorite exchanges like Kraken and Bittrex came in at 2nd and 13th, with scores of 80 and 66, respectively. Interestingly, Binance, the worlds fastest-growing exchange, is 17th, with only a 63 rating.
A Shocking Lack of Security
As the numbers move downwards, it’s shocking to see so many platforms that are found lacking in security for assets. Some exchanges, such as Bibox or Poloniex, scored a one or two out of five regarding web security. In fact, twenty-nine percent of the exchanges had almost nothing to show for all categories.
Of course, the cryptocurrency market is still in its infancy. However, such a lack of reliability is an important obstacle standing in the way of digital assets breaking into the mainstream. Hopefully, some of these platforms will invest in better security measures soon.
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