What’s the first thing you will consider while choosing a crypto exchange? Most of the people go either after reputation or Fees. But there is more to crypto exchange than just these two factors.
You need to check the KYC/ AML process, Leverage options, Volume, Prices, Insurance, Asset Selection, Fiat Exchange and most importantly, Security of the Exchange. Although the reputation and fees of the crypto exchange are important factors, you need to make security your first priority.
We all aware of the scams and frauds related to crypto exchanges. Many people lost their funds due to inadequate security provided by exchanges.
So to help you secure your funds, we are going to discuss about security of crypto exchanges. We will also guide you on how to assure the security of your crypto exchange.
Crypto Exchange
It is a platform where you can purchase and sell cryptocurrencies. You can trade using cryptocurrency as well as fiat currency. All you need to do is create an account with exchanges. You can trade on multiple exchanges as well. It works like a trading platform in a crypto market. Crypto exchanges are involved in trading more than 100 billion dollars in a month.
As the market is growing, the number of threats are increasing as well. So you need to be really careful while choosing a crypto exchange. Make sure it is safe and secure. If you want to protect your funds, you can choose a White Label Cryptocurrency exchange platform. As it is decentralized, there are lesser risks.
Crypto Exchange Security Issues
More than $1 billion were lost in the last few years due to poor security of crypto exchanges. Even after such recurring hacking scams, only 46% crypto exchange have high-level security. You need to pay extra attention to the security factor because of all these reasons.
- Decentralized network:
As it is decentralized, the transactions cannot be reversed. The funds lost will be lost forever.
- Third-Party:
Most centralized crypto exchanges are the third party. When you deposit funds with exchanges, the entire funds are in a third party’s control. It is risky.
- No insurance:
Exchanges many not provide insurance cover for loss of funds. Even if they provide, there might be various conditions and clauses.
How to Assure the Security of Crypto Exchanges?
Now, that we have discussed about the security concerns related to crypto exchanges, let’s see how to assure their security. It is always advisable to choose a trusted and secure crypto exchange for trading. White Label Crypto Exchange Software Development provides a safe and secure platform for trading crypto. Here are few of the factors you must consider in order to assure the security of your crypto exchange.
Cold Storage
In cold storage, the funds are stored offline. The private keys are stored away from the internet to avoid hackers for hacking the funds. Make sure your crypto exchange stores all of your funds or most of your funds secured in cold storage. Some exchanges store 100% funds while others store 95% of funds in cold storage. You must also make sure that the funds are available as and when you require it.
Hot Wallet
Similarly, hot wallet means storing the funds online. Make you’re your exchange protect these funds by using Hardware security modules and multi-signature technology. This provides extra security to protect the funds.
