Fintech Security Playing Catch Up
November 09 2018 - 11:59AM
ADVFN Crypto NewsWire
Bitcoin Global News (BGN)
November 09, 2018 -- ADVFN Crypto NewsWire -- One of the most
commonly cited problems with cryptocurrencies is their security.
This problem has become a major issue over the past decade with
traditional fiat systems as well, where many global companies have
been hacked. Hackers are able to steal users personal information
directly, because credit card information is not always stored
cryptographically.
This process is inherent to most
traditional, public, peer-to-peer cryptocurrencies. However, where
cryptocurrencies are placed into a more traditional setting via
financial investment products like ETFs and many popular Bitcoin
futures, a central holding location is created. This defeats the
major benefit of decentralization for cryptocurrencies, but is
allowing the general public to become aware of their existence.
Most popular cryptocurrency exchanges are centralized, with users’
cryptocurrencies held by the exchange itself. Two cybersecurity
firms have just released a ranking of the top exchanges and their
security measures.
Ranking
Exchanges
Group-IB a Moscow, Germany based
company partnered with the crypto asset insurance platform
CryptoIns to grade the security of U.S.-based exchanges. Their
focus was custody processes:
“In the first place, we assess how
crypto exchanges deal with crypto and fiat assets: what are the
exchanges assets keys’ storage and management procedures” -
Group-IB
The research concluded that Kraken
stood alone as by far the safest crypto exchange. Following Kraken
was Bittrex and Coinbase Pro for the next highest level of
security. At the very bottom of the reports ranking was Yobit.
Somewhat risky exchanges included:
-
Binance
-
Bitfinex
-
Bithumb
-
Bitmex
-
LocalBitcoins
-
MyEtherWallet
-
Poloniex
It’s interesting to note that
LocalBitcoins does not perform custody services like the other
exchanges in this list. The services allows users to exchange
directly peer-to-peer for fiat to Bitcoin transactions. In this
way, any problems or losses would occur because of user-error, and
never because of failure on the developer end.
CryptoIns
Insurance
The digital asset insurance firm is
supported by Swiss insurance broker ASPIS S. The company works at
the institutional level, rather than offering insurance to retail
investors. The new insurance policy covers losses from
“cyber-attacks on exchange software, theft, fraud and illegal
actions of crypto exchange personnel.”
By: BGN Editorial Staff
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