Cryptocurrency Exchange Security
Introduction
I am often asked which exchange is the most secure. Well that question can be hard to answer as the security of a system can only be measured at a point in time as the security of a system is in a constant state of flux. It is never static and what may be secure today may have multiple vulnerabilities the next.
Exchanges also don't give any insight into their internal architecture, security controls, audits, penetration tests etc.. The country's in which they operate in, it's country's regulations could also attribute to the security of the exchange as well.
A better question to ask is which exchange gives me the most controls to secure my account and assets.
Cryptocurrency Exchange Security
I went through the security settings of nine different exchanges to draw a heat map of which security controls each exchange gives you.
In this review are (as of 2018/01/21):-
One exchange may have more green than the other but that doesn't mean the exchange provides more protection. The value of the security control needs to be weighted for an accurate metric comparison. For example, 2-Step-Verification via SMS would have a lower rating than 2-factor-authentication using a Universal 2nd Factor device.
Legend
- Green - Option is available
- Red - Option is not available
- Orange - There is a caveat to the control
- White - I was unable to verify if the control existed
Conclusion
From looking at the heat map you can see Bitfinex give you the largest amount of security controls to secure your account. This is not a recommendation to go out and use them. In August 2016 Bitfix announced it was hacked, with 120,000 units of bitcoin stolen. Bitfinex did offer to pay users back in the form of a token. Tether the cryptocurrency backed by one USD held in reserve by Tether limited was also hacked which has ties to Bitfinex.
You must conduct your own research on exchanges before you use them and then assess your risk appetite before moving forward. Is Bitfinex security controls a result from previous incidents providing its users more controls to protect their account and assets?
Please provide me feedback if you would like this article expanded or if corrections need to be made in the controls.
EDIT:
2018/01/26
- Added BTCMarkets & Coinbase
Leave Cryptocurrency Exchange Security to:
Best Posts From cydera
We have not curated any of cydera's posts yet. But you can encourage our curation team to review posts by visiting them regularly and by referring other readers. Because we give priority to frequently read content.