Choosing a secure cryptocurrency exchange is a top-priority task, and it should be taken very seriously. If you overlook some red flags, it may cost you everything. Decentralization might be a wonderful thing, but if the exchange loses your money to hackers, there will be no central office to contact for help.
Luckily, there are 5 signs that can help you spot a good exchange where your money will be safe. Here they are a few tips:
1). Pay attention to the exchange trading volume which reflects its popularity.
If a platform is popular, there are reasons for it. Exchanges with a big trading volume tend to be more secure, though it’s just a general rule that has many exceptions. Note that some exchanges may inflate their trading volume using bots, but the major ones are very unlikely to use this trick, as they value their reputation.
2). Check if the platform makes mandatory such security features as 2FA (2-factor authentication), strong password, catcha and some others. It does not? A major red flag.
Another thing to check is what share of the users’ funds is kept in a cold storage. Secure exchanges store no less than 95% of the funds offline, where they are safe.
3). Google for the records of successful hacker attacks. Has the exchange you consider ever been compromised? If yes, how much time it took them to solve the problem? If the platform has never been hacked, it means their protection is up-to-date, and they are not trying to save money on cybersecurity and other things of paramount importance.
4). See how much information is provided in the About us section. If the exchange does not bother to mention its address and is being shy about other basic things, it’s a bad sign. On the contrary, the more details are revealed, the better. Though some top-secret exchanges might be enticing you with lower trading fees, but it doesn’t worth the risk of losing all your money one day, as many traders did.
5). Check the social media pages and other web resources of the platform, paying special attention to what exactly and how often they post. If they have played dead for a while, ask yourself why they neglect their social image. If their users complain a lot in the comments, and there’s no reply, may be the team just don’t care.
Also, make a research and ask the crypto community what they think about this particular exchange. Find people who can share first-hand experience (it can be done at crypto forums, or at special question-answer websites like Quora. If there is a lot of bad reviews from people who sound credible and can argue their point of view, it might be waving a red flag, too.
Hopefully, these tips have been helpful for you!