In this article, we will help you to determine if a crypto exchange is secure, or not, in 2020. This will be very helpful if you are about to buy your first Bitcoin and don´t know which exchange to go for.
What parameters should you look for and what are the red flags you definitely want to avoid?
We have been around in the crypto industry since 2013 and we have learned how to avoid the worst scams and most risky exchanges and other crypto related online companies.
We have done it the hard way, we have learned by doing the mistakes. By doing the mistakes, you learn a lot but you have to pay a high price for it.
We created this summary and guide how you can find the most secure crypto exchanges in 2020 to let you pay a lower price than we did.
Also, we let you know how to avoid the worst scams and what red flags you must avoid.
What is a legit Crypto exchange?
A legit crypto exchange is an exchange that serves for a good purpose. A legit crypto exchange doesnt have to be secure or safe but their aim is not to fool you, at least.
A legit crypt exchange just means that it´s not a scam. A crypto exchange scam is a business which aims to fool you and steel your money. It can be a fake website or a fake ICO/IPO for an exchange or similar.
What is a Secure Crypto exchange?
A secure crypto exchange is an exchange that have taken all proactive actions you can ask for.
So what are the proactive actions you can ask for when it comes to crypto exchange security?
- 2 factor login – You need to verify your ID with a secondary unit like the mobile phone or Google authentication
- Cold storage – The cryptocurrencies are stored offline
- Transparency – A dedicated page describing all security features
- Withdrawal protection – This can be to whitelist IP or certain address. It can also be 2 auth, secondary password or email confirmation.
- 3th part audit – Did they ask any security business to audit them?
- Web services – What kind of web services do they use and what security standards does these web services provide?
- Certifications and Assessments – Do they have any certifications or assessments regarding their security
- Withdrawal controls – What controls do they have on withdrawals, especially large withdrawals.
What is a Scam Crypto exchange?
A scam crypto exchange is an exchange that only have one purpose and its to gain as much of your money in a short time.
There are plenty of historic scams in the crypto industry but its quite limited regarding crypto exchanges. Most scams are related to cloud mining or HYIP investment schemes.
Below we have listed a few scams related to crypto exchanges.
Summary - How do I know if a Crypto Exchange is secure in 2020?
We have summarized some rules you should foolow to determine if a crypto exchange is secure in 2020.
- Is it the first time you ever heard about the crypto exchange – Dont sign up but read a few reviews first
- If you find it hard to find good reviews about that crypto exchange – DONT SIGN UP
- If you find a new, or a small, crypto exchange offering a great sign up bonus be suspicious. If you really want to aim for that sign up bonus read all the terms first. Check if there is any reviews of the crypto exchange online.
- Try to avoid all crypto exchanges that you never heard of. Stay with the well-known, large and famous crypto exchanges like Binance, Coinbase, Bitfinex, CEX.io, Kraken, Bittrex and there are many of them. I can promise you that they all can serve your request. Also, they have the best security standards, best exchange rates, lowest fees, best trading features, best deposit and withdrawals and the best of everything. The only thing I can recall they might be worse in are small alternative crypto markets.