Kraken platform has been ranked the safest crypto exchange as cybersecurity firm Group-IB develops an assessment system used in evaluating the security of cryptocurrencies exchanges.
November 8, 2018 | AtoZ Markets - Leading cybersecurity firm, Group-IB has compiled a graded list of top safest cryptocurrency exchanges, as a means of assessing insurance risk.
According to the research carried out by the Moscow-based company in collaboration with CryptoIns, a crypto asset insurance platform, revealed that Kraken, one of the earliest exchanges to hit the market, is ranked the safest crypto exchange.
In contrast, OKEx which is now the second exchange by daily trade volume, as well as Huobi Pro, CoinCheck and a few others are reported to be the high-risk crypto exchanges.
Cybersecurity Firm Develops Crypto Exchanges Assessment System
As per the Next Web, Group-IB alongside IT platform CryptoIns, claim to have newly developed the world's first assessment system that determines insurance premiums required to cover cryptocurrencies kept by major exchanges.
CryptoIns, with the support of Swiss insurance broker, ASPIS SA now offer its insurance services to more than a dozen of major crypto exchanges. Thus, losses resulting from "cyber-attacks on exchange software, theft, fraud, and illegal actions of crypto-exchange personnel are all apparently covered by the new cryptocurrency insurance policy."
In structuring the framework for its new insurance policy, CryptoIns takes into consideration factors such as the "level of technical security, the reliability of basic storage, passwords as well as customers' personal data provided by each exchange.”
The company also considers the individual risk management systems of each exchange, as well as the rigidity of its know-your-customer (KYC) and anti-money laundering (AML) policies.
Moreover, a spokesperson for Group-IB told Hard Fork:
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. In some cases, with founders’ consent, the assessment includes penetration testing using social engineering methods aimed at the network compromise through the most vulnerable link at any organization – humans.
Crypto Exchange Kraken Ranks Number One
According to the analysis conducted by Group-IB, crypto exchange, Kraken has received the highest rating and was the only exchange listed in the first group. Group-IB told Hard Fork:
According to our estimates, Kraken is the most secure exchange, with 1.25 percent insurance rate.
This, however, means that it would cost a trader 0.0125 BTC to insure 1 bitcoin stored on Kraken platform for 90-days worth of coverage. Meanwhile, exchanges in the second group include Bittrex and Coinbase Pro. A cryptocurrency stored on these exchanges would demand a 1.5 percent insurance premium for protection.
When asked by Hard Fork, both Group-IB and CryptoIns declined stating the precise metrics used in determining exchanges that are too risky to insure due to the interests of maintaining confidentiality.
Moreover, it is worthy of note, that the somewhat controversial crypto exchange, OKEx was awarded earlier this week the “Crypto Exchange of the Year” at the Malta Blockchain Awards.
Nevertheless, the exchange, trusted among its millions of users, went out of its way to cancel its unverified user withdrawal functionality back in August to further beef up security, as well as delisting controversial cryptocurrency Bytecoin later in October.
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