2022 was a rough year for the cryptocurrency market, marred by the collapse of several major exchanges within the space. The pandemic and the war in Ukraine are leaving their mark on the global economy, which has impacted the crypto industry.
Still, digital assets are valuable, and many investors have a sustained interest in the market. Here is some more information about the worst exchange crashes in history and what to look for in a crypto broker as the security of user funds becomes a leading concern.
Worst crashes in history
Celsius Network declared bankruptcy last year, and the value of the Celsius token plummeted. Celsius users started withdrawing their Bitcoin holdings en masse, and investors panicked, leaving Celsius in droves. The network halted Bitcoin exchanges, withdrawals, and transfers, citing “extreme market conditions.”
FTX and its US branch FTX US declared Chapter 11 bankruptcy in November last year. The exchange collapsed due to fund mismanagement and a lack of liquidity, leading investors to make a large number of withdrawals.
BlockFi also filed for Chapter 11 bankruptcy in November. The company listed more than 100,000 creditors, with liabilities of up to $10 billion. At that time, the exchange owed FTX US $275,000,000.
In light of these worrying developments, choosing a reliable crypto broker has become of paramount importance. Currently, the safest brokers on the market are Binance, Coinbase, eToro, and OKX. We review each one in the sections below.
Binance features a variety of trading tools, including ordinary moving averages, exponential moving averages, and real-time charting tools. You can place trades through the Binance website or the desktop or mobile app.
You can use the exchange to access your trade history and portfolios and see the order book and price charts as well. Users can choose from order types such as limit order, stop order, stop-limit order, trailing stop order, and stop-market order.
Binance’s security features include device management, address whitelisting, the ability to restrict device access, and two-factor authentication (2FA) via SMS or the Google Authenticator app. The exchange’s US arm, Binance.us, provides FDIC insurance on all balances in USD.
eToro was founded before Bitcoin existed – back in 2007 – and remains among the most reputable and reliable crypto brokers on the market. They offer exposure to crypto, stocks, ETFs, commodities, etc. The broker is very suitable for crypto beginners and enjoys investors’ trust. It is highly secure and supports credit cards for deposits and withdrawals, among other methods.
Coinbase is the biggest crypto broker in the US, with a top reputation when it comes to security. The exchange holds almost 99% of user funds in cold wallets offline, where they are impervious to attack. New users have to validate their phone numbers by entering a code they receive from the exchange via text message. ID verification is a complicated process that involves a video recording. There is also compulsory 2FA on every Coinbase account to ensure security.
If you decide to delete your account, the exchange lets you request the data you provided to them at the beginning. You can have Coinbase delete the data from their servers. They get extra points for processing and disposing of personal data properly.
OKX is not available to users based in the US, but it’s a great option for everyone else who is looking for low fees on buying, staking, and trading crypto. They apply standard security practices such as offline storage for the majority of user funds. You can set up a special password for withdrawing and anti-phishing codes.
OKX offers high-interest staking and intuitive purchase of crypto via e-wallet, card, or bank account. This makes it excellent for people who are new to crypto and have never bought any before.
What to look for in a crypto broker
Safety criteria include regulation, customer support, asset storage, 2FA, insurance policies, etc. When choosing a crypto broker, check if the company is licensed by its national regulator. This can be the FCA for UK exchanges, FINCEN in the US, FINTRAC for Canada, or AUSTRAC for Australia.
A broker should have some kind of customer support that’s easy to access, ex. live chat or by phone. If you have a security problem, you’ll need support ASAP.
Assets held in cold storage are inaccessible, even if an entity hacks the exchange. Reliable exchanges hold at least 90% of user funds offline.
2FA and IP tracking
The broker should require users to activate 2FA or other IP whitelisting or tracking options. Only the user can perform transactions with these security features in place. If you are mandated to use 2FA, you can play an important role in ensuring your account security.
Fees and fine print
Check the fees and read the fine print at the bottom of the homepage, as well as the broker’s terms and conditions.
Insurance policiesThe exchange should have an insurance policy through an authorized body, such as the FDIC. This will protect your funds if it gets hacked or otherwise breached.
Publicly traded companies like Coinbase undergo in-depth audits and other regulatory checks. Private brokers can be very safe too, but a public listing helps as it means the company has undergone a thorough examination.
This article is for informational purpose and may contain links to external websites which we have no control over. Users are advised to make proper research before making any financial decisions.
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