Security has always been an important issue for cryptocurrency exchange users. Several hacks in the past showed how vulnerable certain exchanges are to hacker attacks. Cyber security company Group-IB now rated the safety of major cryptocurrency exchanges Worldwide.
According to research conducted by the Moscow-based company in partnership with CryptoIns, Kraken is the safest cryptocurrency exchange. In contrast, Group IB classifies OKEx, the world’s second-largest cryptocurrency exchange in volume, as well as Huobi Pro and CoinCheck as less secure.
The IB Group classified all exchanges with a newly developed valuation system that calculates the insurance premiums to cover the cryptocurrencies held by the major exchanges in the market.
Group IB published its annual report earlier this year. According to the report, attacks on cryptocurrency exchanges in 2017 and the first 3 quarters of 2018 represented losses in the amount of 877 Million US Dollars. And this did not take into account hacks that were not reported or identified as those.
CryptoIns, which is supported by the Swiss insurance broker ASPIS S, is offering its insurance services several major crypto exchanges. The new insurance policy allegedly covers losses like “cyber attacks on exchange software, theft, fraud and illegal actions by the staff of the crypto exchange.”
The risk assessment of exchanges takes into account factors such as level of technical security, basic storage reliability, passwords and customer personal data. The framework also considers risk management, as well as Know Your Customer (KYC) and anti-money laundering (AML) policies.
Group-IB and CryptoIns did not disclose the precise metrics used to determine the security of any given cryptocurrency exchange. They want to maintain confidentiality of the data.
Safety becomes an increasingly important issue for cryptocurrency exchanges. As more institutional actors enter space, security will be a major item for the coming years. Hacks like the ones on Bittrex, Coinchek or Mt. Gox show the importance for a safe environment.