There are hundreds of cryptocurrency exchanges around the world, and if you have never bought or sold cryptocurrency, you might be confused as to how to choose the right one. Although there are other criteria to consider, the safety of your cryptocurrency is of utmost importance. Therefore, we are going to look at how you can go about choosing the safest cryptocurrency exchange.
Do Your Research
One of the best ways of knowing how safe a crypto exchange is, is by doing your research. Going on their website is not enough because many businesses only post positive testimonials on their homepages. Instead, start on social media. Try to find crypto discussion groups and see if there is anything said about the safety of the exchange you are considering.
You can also try to find news articles about them because if there have been any security or safety issues with the exchange, there likely is a news report about it.
Registration and Licensing
When choosing a safe crypto exchange, it is important to check if they are registered and licensed in the country that they are located in. Getting registered and licensed as a crypto exchange means they have undergone rigorous checks before they are allowed to accept your money. Some of these checks involve ensuring your cryptocurrency is safe no matter what happens to the exchange.
A cryptocurrency exchange often cited as a good example of a registered exchange is Coinberry. They are registered with the Financial Transactions and Reports Analysis Centre of Canada and have segregated accounts for company and client funds. This means if Coinberry was to go down, you would still get your money or cryptocurrency.
Check Their Security Features
If an exchange’s website is not secure, it could be hacked and your funds stolen. Although it is almost impossible to know what security measures they have put in place on their back end, they should have HTTPS on their homepage. Avoid all exchanges that still use HTTP.
Also, check to see if the exchange uses two-factor or multifactor authentication. This should ideally be an authenticator you have on a different device you own or a one-time password sent through text or email.
Use of Cold Storage
Crypto exchanges that take their security seriously rely heavily on cold storage. Cold storage stores cryptocurrency offline so that it is inaccessible through the internet which keeps it out of the reach of hackers.
If an exchange is confident that it can keep your money and crypto safe, it should be transparent about all aspects of the company behind it. For example, it should not be hard to find out who the owners of the exchange are, where the company is headquartered, or even the team behind the company.
The exchange should also be transparent about the cold storage solutions they use and their cold storage address so you can check it out yourself.
Security concerns surrounding cryptocurrency are understandable, especially considering how many exchanges have been hacked over the years. These concerns, coupled with the hundreds of exchanges that exist, can make it difficult to choose a safe exchange. However, if you follow the tips above and keep an eye on the exchanges you use, you have nothing to be worried about.