The growing interest in cryptocurrencies has led to the emergence of a wide selection of both digital money and the sites where you can exchange one cryptocurrency for another.
Some of these sites are peer-to-peer exchangers - users exchange directly with each other on terms that are discussed individually in each case. Such a system may be convenient for one-time operations, but entirely unsuitable for regular trading.
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Therefore, as the market develops, more and more transactions begin to be conducted through cryptocurrency exchanges. The daily trading volume of one of the largest cryptocurrency exchanges, Binance , is about $1.5 billion, and it’s competitors don’t lag.
The main risks for an investor using the services of cryptocurrency exchanges are their possible bankruptcy, commonplace fraud on the part of the exchange itself, and hacker attacks. It is possible to predict the unfair behavior of the exchange owners; however, you never know which cryptocurrency exchange is hacked next.
Bank-level Security — a Cornerstone when Choosing Cryptocurrency Exchange
When choosing new sneakers, you consider them according to your requirements, and not what the seller advises, as is the situation with the cryptocurrency exchange.
If your primary concern is the bank-level security of your trade deposit in the future, then you need to take a closer look at what is inside a cryptocurrency exchange.
The lack of regulation in the Bitcoin industry negatively affects the protection of investors. Exchange management does not bear serious responsibility, so they can afford to take security lightly.
Breaches of Exchanges — No Need to Count
It’s impossible to enumerate all the cryptocurrency exchanges that were hacked. Some breached platforms don’t announce being hacked (looking at you, KipCoin); some even don’t know that they were breached and hackers continue to suck out money as happened with Mt.Gox. You can find a complete list of cryptocurrency thefts here that is created from all announced or discussed security breaches.
Must-have for Secure Cryptocurrency Exchange
Concerns about the low level of cryptocurrency exchanges’ security let the public start investigations and monitoring.
Thus, in January-March 2018, experts from the Ministry of Science and Technology and the Korean Internet Security Agency (KISA) identified serious flaws in Korean cryptocurrency exchanges. As a result, they gave the exchange platforms 6 months to eliminate deficiencies.
In June-July, the South Korean government released the monitoring results where 11 out of 21 inspection objects were able to eliminate the most urgent problems in security systems.
The focus of the audit was on such aspects as the responsibilities of security and management employees, password management systems, deposit and withdrawal systems, and wallet monitoring systems for unusual or suspicious transactions .
According to the latest analysis by ICORating analysts, 16% of the world's largest cryptocurrency platforms were assigned an “A” rating, and none received an “A +”. An analysis published December 18 rated Kraken at (A), Cobinhood (A) and Poloniex (A-), ranking them among the top three safest exchanges in the world.
ICORating rated 135 crypto exchanges, whose daily trading volume exceeds $100.000, based on four security categories: user account security, domain security, web security, and protection against DDoS attacks .
The four security categories of analysts were divided into a number of specific test parameters. Regarding user security, the report evaluated four criteria, including password protection and two-factor authentication , and it was found that only 22% of the platforms studied met all four parameters.
The Need for a Secure Cryptocurrency Exchange
So what are we having here?
The cryptocurrency exchange that can keep your assets safe should possess at least this set of requirements:
- responsible security and management employees
- password management system
- deposit and withdrawal system
- wallet monitoring system for unusual or suspicious transactions
- user account security
- domain security
- website security
- protection against DDoS attacks
What if we tell you that there is an exchange that can satisfy all these requirements and even more?
ROKKEX was created by experts in cybersecurity, banking, and financial spheres. They know how to provide bank-level security for financial assets of different nature, including Bitcoin.
On August 26, ROKKEX starts Security Token Offering (STO) to build another product focused on cybersecurity — Securities Exchange Platform.
Final Thoughts
Given the high interest of users in digital currency, hacking cryptocurrency exchanges will be a source of profit for hackers for a long time to come. Even knowing the main methods of hacking, the exchange management cannot foresee whether their site will be hacked and how exactly this will happen. Each use of bugs is unique.
It is also worth noting that hacking of accounts on exchanges often occurs not through the fault of the exchange, but because of the negligent attitude of users.
It is enough for an ordinary investor to show a little attention, carefully study the feedback on the forums, and adhere to the rules of the exchange platform.
