Trusted cyber-security firm Group-IB has compiled a new graded list on the safest online cryptocurrency exchanges. The data collected was used to determine specifically which exchanges offered the lowest insurance risk for a new crypto insurance policy program by IT platform CryptoIns. Interestingly, one of the earliest exchanges to hit the market, Kraken, was ranked as the most secure, while OKEx, Huobi Pro, Coincheck and a few others bottomed the list.
Details of the Rankings
In partnership with IT platform CryptoIns, Hard Fork reports that “Group-IB claims to have developed the world’s first assessment system for determining the insurance premiums required to adequately cover cryptocurrency kept on major exchanges.” CryptoIn’s new insurance policy covers for losses from “cyber-attacks on exchange software, theft, fraud and illegal actions of crypto-exchange personnel.” CryptoIns is now offering its insurance policy to token holders on more than a dozen exchanges.
In structuring the framework for its new insurance policy, CryptoIns told Hard Fork that it weighed various exchanges in a series of categories, including “the level of technical security, the reliability of key storage, passwords and personal data of customers provided by each exchange.” The company also evaluated the individual risk management systems of each exchange, in addition to the rigidity of its know-your-customer (KYC) and anti-money laundering (AML) procedures.
“In the first place, we assess how crypto exchanges deal with crypto and fiat assets: what are the exchanges assets keys’ storage and management procedures,” a Group-IB spokesperson told Hard Fork. “In some cases, with founders’ consent, the assessment includes penetration testing using social engineering methods aimed at the network compromise through the most vulnerable link at any organization – humans.”
With the help of Group-IB, CryptoIns divded cryptocurrency exchanges into four groups based on overall risk. The exchanges in the first group were determined to have the least level of overall risk, while the fourth group was labeled ‘completely uninsurable’. The overall price of CryptoIn’s various insurance policies is predicated on which group the customer’s exchange of choice falls into. Base insurance rates start at 2.5 percent per quarter, with discounts applied based on exchange grouping.
Kraken Exchange at Number One
Cryptocurrency exchange Kraken received the highest rating from the analysis conducted by Group-IB, and was the only exchange listed in the first group.
“According to our estimates, Kraken is the most secure exchange, with 1.25 percent insurance rate,” Group-IB told Hard Fork.
The second group included Bittrex and Coinbase Pro, with a 1.5 percent insurance premium protection plan from CryptoIns. Finally, the third group, at a 1.9 percent insurance premiums, includes crypto exchanges Binance, Bitifinex, Bithumb, Bitmex, Localbitcoins, MyEtherWallet and Poloniex. The bottom group of least secure exchanges included Zaif, Bitstamp, Bit-Z, and as mentioned above, OKEx, Huobi Pro and Coincheck.
When asked by Hard Fork, neither Group-IB nor CryptoIns were able to share the confidential information detailing the specific reasons behind why the lowest listed exchanges received their grouping. Interestingly, and somewhat controversially, OKEx was awarded the “Crypto Exchange of the Year” award at the Malta Blockchain Awards earlier this week. Widely considered a trusted exchange among its millions of users, OKEx went out of its way to terminate its unverified user withdrawal functionality in August to further beef up security, in addition to delisting controversial cryptocurrency Bytecoin later in October.
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