BrokerChooser, a company that provides comparative market data for investors in digital assets, shared a new study that analyzed the most prominent crypto exchanges in the world and the level of security they offer.
For BrokerChooser Legal Director Zoltan Kormanyos, the research was conducted to help investors “navigate the risky and mostly unregulated world of crypto exchanges,” at least 20 of the world’s crypto exchanges were analyzed. longer trajectory.
The research was based on different metrics in order to determine which are the safest exchanges for investors:
The Coinbase online platform is considered the safest crypto exchange overall and the largest in the United States by trading volume.
According to the study carried out, the platform is widely known for its security features, and was ranked as “a tier 1 exchange” for most categories.
According to the study, the exchange is rated as the most transparent (4.8/5). This is because the platform makes information readily available to the public in terms of its corporate structure, financial statements and legal documents, in addition to offering a relatively simple product offering.
According to the information collected in the analysis, only two factors of the online platform Coinbase were located at level 3: hacking incidents and restrictions on proprietary trading, due to multiple recent attacks and the statement in its trading rules that they trade their own corporate funds on Coinbase.
other exchanges
Cryptocurrency derivatives exchange FTX US Derivatives (formerly LedgerX) ranks second in this study.
The digital currency futures and option exchange and clearing house is regulated by the Commodity Futures Trading Commission (CFTC), which considers it “falling” at level 1 for most security index factors. crypto exchange.
Although according to the analysis, FTX US Derivatives achieved a high score in each of the pillars, except for transparency, obtaining a score of 2.3, which translates into little or no legal financial transparency to offer and complex products.
Bitstamp, based in Luxembourg and the United Kingdom, scored 3.8/5, ranking third for the most secure encryption.
The virtual currency transaction platform keeps 98% of assets offline in cold crypto storage, considered to be the most secure form of crypto storage, thanks to the fact that it is protected from possible hacking violations.
Additionally, Bitstamp offers simple and straightforward products to its customers, uses two-factor authentication and address whitelisting, plus has an extra layer of protection with a crime insurance policy that covers theft.
For this fourth place two exchanges are located simultaneously in this position. In first place is Bittrex, with a fairly favorable score when it comes to market fairness (3.7 / 5) and crypto exchange Gemini, with a score of 3.7 out of 5.
Bittrex offers its users cold storage of most funds, with other measures such as two-factor authentication and wallet and IP address whitelisting. It has a number of advanced security features to help protect your funds.
For its part, Gemini is regulated by the New York State Department of Financial Services (NYDFS).
The study found that no exchange got a perfect score of 5 out of 5in the category of consumer protection, however, the exchange that presented the best performance in this line was Gemini, with a score of 4.8.
The platform offers additional security features for institutional traders, and secures your wallet against security breaches and fraudulent-type actions by having a solution called “captive insurance”.
Additionally, most funds are kept in an offline cold storage system, air-gapped, with all US dollar balances in “segregated” bank accounts covered by Federal Deposit Insurance Corporation (FDIC) insurance.
Binance, the world’s largest cryptocurrency exchange, earned a security score of 1.6/5, ranking 15th. among the safest exchanges, however, it got the worst rating in the transparency pillar (1.0/5), along with other platforms such as OKX, KuCoin, Gate.io, Bybit, Phemex.
In this pillar, it is reflected how not all exchanges offer extensive information on their platforms, on the contrary, this means that the information they offer is very limited or very complex to be understood by average consumers, or on the contrary, is almost nil about their finances and products.
The Least Safe Exchanges for Regulation
In the regulation pillar, the exchanges that scored the lowest when it came to this item were KuCoin and Bybit, scoring 1 out of 5.
Both companies are not regulated and have recently had regulatory investigations against them. For its part, KuCoin, in 2020 (March) received a court order in Singapore and in April of that same year, it also received a class action lawsuit in the United States and a regulatory action in Ontario.
As for the Bybit exchange, it is currently under a regulatory investigation in Canada over the operation of an unregistered crypto asset trading platform.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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