Crypto asset investments, which are already quite risky, can sometimes disappear due to stock exchanges. So what should be done to understand whether a cryptocurrency exchange is reliable or not?
Recorded as the most controversial investment instruments of recent years, crypto assets, has been on everyone’s lips lately. The most important reason for this is that Bitcoin (BTC), the number one cryptocurrency, has started its upward trend. This situation caused crypto assets to start being talked about in many circles. Of course, altcoins, which rise in parallel with BTC, provide serious amounts of money to many people. made money.
However, this does not mean that everything is rosy in the cryptocurrency community. careless investors, they can often lose all their money due to stock markets. To be clear, you have to choose a safe exchange. So how can we find the right safe cryptocurrency exchange? Which crypto exchange is safer? On the cryptocurrency exchange Criteria that determine security which ones?
Why is the security of cryptocurrency exchanges so important?
No matter which crypto asset you invest in, you should primarily your own safety You have to provide it. Because you are investing in some way and want to make a profit from it. In this context; Precautions you can take as an individual include basic things like using strong passwords and two-factor authentication. However, it is up to you to ensure your own safety. it doesn’t end. The exchange you choose must also meet some security criteria.
One of the most important risks for a cryptocurrency exchange is undoubtedly are cyber attacks. Hackers will do their best to seize funds reaching billions of dollars. At this point, an exchange must take precautions against security vulnerabilities. But that’s not all there is to it. You should definitely trust the stock market you will invest in and because he has legal identity You must be sure. In addition to all this; It is also very important that the stock market does not use your money for its own purposes.
Security criteria to consider when choosing a cryptocurrency exchange
We hope we agree that you should choose a reliable exchange to avoid the risk of losing your money. So when choosing a cryptocurrency exchange? need attention What are the criteria? Now, let’s get into titles. standardized Let’s take a closer look at the criteria.
KYC (Know Your Customer)
Know Your Customer or as it is known in the industry KYCis an important factor in understanding whether an exchange is reliable. Because with the KYC system, the exchange receives the user’s identity information and passes it through a control process. If you are using an exchange and that exchange does not have a KYC system, there is a reasonable you may have doubts.
SSL/TLS certificates
Internet protocol certificates, not just for exchanges for all websites is of critical importance. These security certificates show whether user data is securely transported to the cryptocurrency exchange’s central servers. If the exchange you prefer does not have these certificates, you will be warned by your internet browser. Run away without even looking back…
2FA support
The widespread use of the Internet, also known as 2FA two factor authentication systems became mandatory. 2FA systems generally require multiple verifications when logging into a channel. If the exchange you will use does not support 2FA, it means that exchange does not care enough about your security. Because 2FA systems are very easy to integrate into websites. This being the case, not making this integration, It is clearly a sign of malicious intent.
Ability to provide proof of reserve
One of the most important indicators of the financial sustainability and reliability of a cryptocurrency exchange is proof of reserve. So what is this proof of reserve? Proof of Reserve is an indication of whether a cryptocurrency exchange stores user funds. Cryptocurrency exchanges, which regularly share their reserve proof reporting, also guarantee the safety and repayment of user assets in the event of any attack, bankruptcy, or withdrawal from the market. Cryptocurrency exchanges that offer proof of reserve keep the funds deposited by customers in an equivalent form and do not use these funds for any other purpose. OKX and world-famous cryptocurrency exchanges such as Binance regularly provide proof of reserves.
Cold wallet support
One of the general acceptances in the security world is that any hardware or device that has any contact with the internet, is vulnerable to security risks is the truth. Cold wallet technology means storing digital assets on offline devices that are not connected to the internet in any way. These cold wallets are protected with private encryption keys and advanced encryption standards. Users can deposit their assets on cryptocurrency exchanges that offer this feature, if they wish. in cold wallets may choose to keep it. Cold wallets can be compared to the safes in bank branches.
Compliance of the exchange with legal and regulations
One of the signs that show that a cryptocurrency exchange is reliable is the market presence in which it operates. is a commercial asset. If a cryptocurrency exchange is incorporated with a trade name in the market in which it operates, it can be assumed that that company is subject to the trading rules of that country and the regulations governing the relevant industry. In case of a complaint, a customer can file a lawsuit against the relevant stock exchange, or file a lawsuit against a company with legal existence. can find a legal interlocutor. In addition, cryptocurrency exchanges must comply with the regulations and legislation regarding cryptocurrencies determined by the local financial authorities of the markets in which they operate.
Their collaboration to ensure security
The cryptocurrency ecosystem is not just about exchanges, it is about crypto analytics, cryptocurrency security, cryptocurrency intelligenceIt is a large ecosystem with many startups and companies working in areas such as blockchain security. For example, industry-wide accepted cryptocurrency custody solutions providers such as Fireblocks, full-scope security solutions providers such as CertiK, and vulnerability alert service providers such as HyperNative are among the stakeholders of the ecosystem. Cryptocurrency exchanges, which attach importance to trust in the eyes of customers and business continuity, establish partnerships with these companies and carry out regular audits. Exchanges that openly state that they have partnered with companies focusing on crypto security and share their audit results transparently, are more likely to be more successful than those that do not. is safer.
24/7 support services
One of the issues that shows whether a stock market is safe or not and gives confidence to investors is 24/7 trading. user support service. In this sense, most reliable financial institutions put customer service and user experience at the center of the business and see it as a strategic priority. In order to respond to customer problems, questions and requests as quickly as possible, it employs teams that provide 24/7 active support through channels such as call center, chat bot, WhatsApp support line and social media. In this way, customers can find a contact person at any time of the day for any questions or problems. This indicates how seriously an exchange takes its activity in that market and customer satisfaction It is one of the features that show how much he cares.