There are dozens of crypto exchanges with high trading volume, and therefore, picking the right one can be a bit overwhelming, especially for beginners.
But, beginner or not, you would not want to move your hard-earned money to an unreliable or unsafe platform. So, what are the safest crypto exchanges? Let’s find out below.
1. Kraken
Launched in 2011, Kraken is one the most widely-available crypto trading platforms in the world, supporting all countries except North Korea, Cuba, and Iran.
Despite the global availability, Kraken has not compromised on the security front to satisfy the demand. In fact, it is one of the most secure crypto exchanges out there. Like all reliable exchanges, Kraken stores the vast majority of user deposits offline. Its servers are surveilled by armed guards, while employee access to them is strictly controlled.
What’s more, Kraken encrypts all sensitive user information and has robust protection against cyberattacks in place. And in terms of user-level security features, it utilizes two-factor authentication, email confirmations for withdrawals, etc.
Kraken is ideal for those not too comfortable with sharing their identity: Only the “Pro” verification level requires jumping through verification hoops, so beginner and intermediate traders can start using their accounts immediately.
Perhaps more importantly, Kraken has gone one step further than most exchanges regarding safety, launching Kraken Security Labs, a team of experts tasked with improving the platform’s cybersecurity profile.
2. Gemini
Founded in 2014, Gemini has positioned itself on the market as a security-focused cryptocurrency exchange, implementing various creative mechanisms to protect traders’ funds.
For a start, Gemini keeps most of its crypto in cold wallets or hardware wallets, which are not connected to the internet and are therefore not vulnerable to hacking and breaches.
There are no private keys at Gemini’s offices. Instead, the keys are geographically distributed at secure data centers—access to which is restricted.
Furthermore, Gemini is insured, so in the event of a breach—whether by an employee or an outside actor—your funds would be safe.
So, what are the downsides?
Gemini is regulated by the New York State Department of Financial Services, which means the exchange has to collect information about users. This also means that you need to provide your full name, address, and proof of identity when creating a trading account on the platform.
3. Coinbase
Coinbase has long been a popular choice for experienced traders as well as beginners, and it’s one of the largest cryptocurrency exchanges by trading volume.
Like Gemini, Coinbase stores most of its crypto offline in a cold wallet. Furthermore, the company claims that 98 percent of the deposits are stored in guarded facilities.
All digital assets on Coinbase are insured against cybersecurity breaches and theft, though the insurance does not cover any losses resulting from user error.
Coinbase accounts have multi-factor authentication enabled, which adds another layer of security and helps prevent breaches and phishing attacks.
Coinbase supports trading over 100 cryptocurrencies, but fees are relatively high compared to other exchanges. Additionally, just like Gemini, Coinbase is not exactly an anonymous platform, and you will need to verify your identity to be able to trade on it.
4. Crypto.com
Based in Singapore, Crypto.com has expanded in recent years, amassing millions of new users and having stars such as Matt Damon appear in its commercials. But what is its safety profile like?
Crypto.com stores 100 percent of user cryptocurrencies offline, while its hardware storage is insured by $750 million against theft and physical damage.
Multi-factor authentication and withdrawal protection are in place to protect user funds. The former includes biometric and email verification, so you have multiple options for authentication.
Crypto.com actually had to prove its dedication to securing user funds in January 2022, when it suffered a breach with hackers stealing around $30 million of cryptocurrency.
As Forbes reported at the time, the company was able to stop most unauthorized withdrawals and fully reimbursed affected customers in the end. It has since introduced additional safety features.
5. Binance
A new player on the crypto scene, Binance was launched in 2017 by Chinese-Canadian businessman and investor Changpeng Zhao. Since then, it has grown rapidly and is now the largest crypto exchange in the world by trading volume.
Binance is more than decent when it comes to security as well. The platform keeps most user funds and assets in cold storage. Additionally, all withdrawals and password reset attempts are monitored, while any unusual activity results in withdrawals being suspended for up to 48 hours.
Sensitive user data is encrypted, and there are several strict sign-in protocols in place, including two-factor authentication, security notifications, and SMS and email verification.
On the downside, the verification process is fairly complex, and the platform itself is not too beginner-friendly, with the US version being more limited than others.
Binance suffered a minor security breach in 2019, with roughly $40 million worth of cryptocurrency stolen from the platform (the daily trading volume on Binance is typically in the tens of billions). Fortunately, the company handled the breach well, immediately offering a full refund to affected users, as per Asia Times.
What Is the Most Secure Crypto Exchange?
Gemini, Coinbase, Crypto.com, Kraken, and Binance are all relatively secure platforms, and as long as you follow basic security protocols, your funds should be safe on either of them, but none of them are perfect.
Moreover, the cryptocurrency industry is still in its infancy, so fraud and security breaches are more prevalent than one would like them to be. The digital assets market is notoriously volatile, and privacy features inherent to most cryptocurrencies have attracted all kinds of criminals.
But regardless of which crypto exchange you choose, arguably the best thing you can do to secure your funds and assets is to withdraw them to your own wallet. Keeping most of your funds on an exchange or in a digital wallet is, in some ways, asking for trouble.
