Since cryptocurrencies came around, over $16 billion has been hacked. January through May 2020 already saw about $1.36 billion stolen in crypto crimes, according to research. Since May, more hacks have taken place, including the most recent KuCoin; it is among the exchanges hacked that cost it $150 million.
CypherTrace noted that 2019 hacks were the highest amount reported, with over $4.5 billion reported missing. CipherTrace Report 2019 stated that although exchanges, wallets, and other cryptocurrency custody services are strengthening their defences, hackers continue to innovate and beat the current state of the art in cybersecurity.
So, Which Exchanges Have Never Been Hacked?
Due to outdated technologies and security protocols, many exchanges in the past few years have fallen victim to hacks. Cryptocurrencies themselves are very secure, but exchanges are prone to attacks or hacks. Often you can hear cryptocurrency exchanges being targeted, but few sites are still safe from these malicious people.
There are a few exchanges; however, that has not been hacked yet. Some of the top exchanges that have never been hacked include:
Gemini
In 2015, Tyler Winklevoss founded Gemini. Launching more recently than most of its competitors, Gemini quickly gained a huge percentage of the cryptocurrency trading market.
Gemini exchange values security above all else. It observes the following three crucial aspects of its security.
- Company Legitimacy
Gemini Trust Company is regulated by the New York State Department of Financial Services (NYSDFS). It requires them to meet capitalization, compliance, anti-money laundering, consumer protection, and cybersecurity requirements set by the NYSDFS.
- Safety of Funds
Gemini takes caution to ensure its customer funds are secure.
The majority of cryptocurrency funds are stored in offline cold storage, rather than hot wallets. It uses multi-Signature technology to eliminate single points of failure. These offline wallets are stored in multiple secured facilities.
- Personal Account Security
Gemini requires all users to enable 2-factor authentication, which will be used as a second code when logging in and withdrawing.
Huobi
Huobi has been around for quite some time, since 2013. As one of the “Big Three” exchanges in the world, it claims to have reached a record amount of 380,000 BTC traded daily on February 25, 2014.
In 2018, Huobi launched its own User Protection Fund. It prides in being an extremely secure and reliable exchange. Its User Protection Fund ensures that 20% of its net revenue would be used to buy back Huobi Tokens (HTs). The HTs are placed in the Huobi User Protection Fund to solely be used for security purposes and user compensation in case of theft or a security breach.
Huobi also launched its Huobi Security Reserve, which provides different methods and solutions for digital asset protection. Huobi intends to guarantee all losses fully compensated if it wasn’t the user’s fault. No attempts have been made to hack the exchange yet.
Liquid
The liquid exchange offers a highly responsive website and interface, the most user-friendly experience in all workflows: account sign-up, security walkthrough, KYC process and support mechanisms. The platform appears to have been designed meticulously with the trader in mind. It is the best performing platform users have reported to date.
The Liquid takes account security very seriously, evident by the mandatory 2FA for all users and the ability to withdraw only to whitelist addresses. Also, it manually processes withdrawals once a day and keeps all funds in cold storage. It has proven successful so far as Liquid has not been hacked.
Although we cannot predict the future, it is safe to say that Liquid goes to lengths to protect user funds from a possible breach. However, Liquid doesn’t offer insurance for user funds.
Today, Liquid announced that due to the recent hack at another exchange, it temporarily halted deposits of WOM. However, all other deposits & withdrawals are working as per normal.
Kraken
The Kraken team learned a lot from Mt. Gox hacks and has never been hacked. We can attribute this to its security features. Most of its currency is offered offline. Also, it offers users two-factor authentication for their accounts.
Despite never being hacked, A possible data breach of the exchange may have taken place early this year. The story is, however, still shrouded in darkness and unconfirmed as Kraken did not confirm the theft of information or any stolen funds.
Kraken maintains a team of experts dedicated to testing the system’s vulnerability to any cyber attack; a tip other exchanges can adopt.
Coinbase
Coinbase is one of the biggest cryptocurrency companies, supporting over 100 countries, with more than 30 million customers around the world.
Earlier this year, Coinbase was able to stop some customers from sending bitcoin to the hackers by blacklisting the hackers’ wallet address. Specifically, it prevented just over 1,000 customers from sending around $280,000 worth of bitcoin during the attack. Roughly 14 Coinbase users sent around $3,000 worth of bitcoin to the scam’s bitcoin address before the company moved to blacklist it, the company said.
However, Coinbase reports that it has never been hacked. 98% of its funds are stored offline hence increasing security.
Conclusion
Exchanges are a target for hacks as they keep a portion of user funds in hot storage for faster transactions. They also store user account passwords and private keys, if not stored securely, user accounts can be vulnerable to hacking.
Cryptocurrency hacking attempts are mainly successful when there are poor security practices. Cryptocurrency users need to choose their exchanges wisely. Since crypto exchanges need to up their security, users have a role to play in preventing hacks. Users should keep their private keys private. Users should use exchanges solely to exchange cryptocurrencies, then transfer coins back to a private account. Together, these measures work against hacking attempts.
