Welcome,
This article will evaluate regulated and safe crypto interest accounts with insurance.
Crypto lending companies with interest accounts are open to announcing and marketing the insurance they use and their regulations.
However, because of this, many companies are not transparent with their security IT standards, which can be hard to compare. They all have the same explanation. Such transparency would make them more vulnerable. This is, of course, genuine, and therefor, it can seem like a trustworthy explanation.
What is a Safe Crypto interest account?
- Licenses and Regulations
- Insurance and Cold Storage
- Account and Login Security
- Team and Operational history
Licensed and Regulated Crypto Interest Accounts
A licensed and regulated crypto company offering interest accounts as a service must provide certain information to the authorities
Such information could consist of
- Adequate operational capital
- The internal and external auditor is mandatory
- Sound Anti-money laundering (AML) policies and procedures
- Data protection and security
Crypto Interest Accounts with Insurance and Cold Storage
Crypto interest account providers usually use 3rd party services for insurance and cold storage. Some of these services are
Ledger Vault
Ledger Vault is a cold-storage solution optimized for institutional usage. It is one of the most secure and flexible ways for exchanges and crypto banks to store and manage their private keys. The Vault also ensures digital assets. NEXO uses Ledger Vault for custodial infrastructures, like insurance and cold storage. YouHodler has also partnered with Ledger Vault.
Galaxy Digital and BitGo
Galaxy Digital acquired BitGo and provides cold storage wallets with insurance protection. In addition, Nexo is using BitGo, among other crypto exchanges and lending platforms.
Fire blocks
Many crypto business use Fireblocks software and APIs to custody, manage treasury operations, access Defi, mint & burn tokens, and manage their digital asset operations. For example, Midas Investments are using Fireblocks.
Bakkt
Bakkt Warehouse, the company’s regulated custodian, comprises both online and cold storage. For extra protection, Bakkt’s wallets are covered by an insurance policy from a leading global carrier.
Estana Custody
Kraken is using Estana’s custody.
Celsius Self-insurance
Celsius acquired the Israeli crypto custody technology firm GK8 for $115 million. As a result, they are about to offer self-insurance and will now be able to provide an “all-in-one platform built for banks and financial institutions.”
Account and Login Security
Personal account security is critical, and even if the service supplier must develop these features, it´s up to the end user to enable them and use them. Many crypto applications, wallets, and exchanges force users to switch on 2 FA significantly when the value exceeds a certain amount.
Below, we have listed some features we think can be worth considering when comparing personal account and login security standards.
- 2 FA Authentication (Google Auth)
- Withdrawal confirmation (through 2nd password, email, SMS, Google Auth)
- Allowing withdrawal addresses or IPs
- Login alerts (through email or SMS)
Most of thety features mentioned above are implemented in all serious cryptocurrency platforms.
Team and Operational History
Another essential factor to consider
- Who did start the company, and what history does the team have?
- How long did the company operate?
- Did the company experience any hacks?
It’s easy to find how long the company has operated. Of course, there is more risk to entering and depositing into a new company than a company that has existed for several years.
Suppose a crypto company did experience any hack or not doesn’t tell you too much because there have been so many hacks. However, how they handle it in terms of communication and repaying the hack to their customers is very important.
Safe Interest Account Summary
In the table below, we have summarized the different interest account providers.
- Licenses and Regulations
- Insurance
- Account and Login Security
- Team and Operational history
Company
1
2
3
4
Binance Safety Information
- Binance is working hard on regulations and licenses. They have longed to be seen as the unregulated crypto exchange adding any feature they like. However, Binance has started to embrace rules and works a lot to meet the requirements. Lately, Binance has successfully get regulated in Bahrain and Canada.
- Binance is building its insurance fund to counter potential hacks in the future. Previously, Binance had no insurance policy, but they paid their customers back from a previous hack.
- Binance has all account and login security features you can ask for.
- Binance has a solid team and an excellent historical reputation.
NEXO Safety Information
- NEXO is regulated and licensed in numerous jurisdictions worldwide as they provide their services to 200+ countries. Armanino audits Nexo.
- Nexo’s total insurance portfolio now amounts to 775 000 000 USD.
YouHodler Safety Information
- YouHodler is not regulated or licensed in any jurisdiction.
- They are connected to Ledger Vault, a digital asset management system and $150M pooled crime insurance.
- YouHolder has all account and login security features you need to protect your account.
Kraken Safety Information
- Kraken is regulated by FinCEN and registered as a Money Services Business (MSB).
- Kraken has no deposit insurance program.
Crypto.com Information
- Crypto.com has become the first global cryptocurrency platform to receive a Class 3 Virtual Financial Assets (VFA) License from the Malta Financial Services Authority (MFSA).
- Crypto.com’s full cryptocurrency insurance is $750M.
Coinbase Safety Information
Coinbase is regulated and complies with all applicable laws and regulations in each jurisdiction in which it operates.
Coinbase is required to comply with several financial services and consumer protection laws.
Coinbase carries crime insurance that protects a portion of digital assets against losses from theft, including cybersecurity breaches.
However, the policy does not cover any losses resulting from unauthorized access to your personal Coinbase or Coinbase Pro account(s) due to a breach or failure of your credentials.
