Key takeaways from the study by Beyond Identity:
- Crypto.com ranked as the best exchange for security.
- Binance is the most trusted exchange by crypto investors.
- Nearly two in five crypto and NFT owners are worried their accounts could be breached.
- On average, victims of crypto account breaches lose more than $150.
The state of crypto account security
Like any new and innovative technology, cryptocurrency has attracted malicious and fraudulent actors since its inception. Crypto exchanges are particularly vulnerable to hackers because they deal with vast amounts of digital currency. Investors must safeguard themselves against thefts, scams, and hacks so they don’t lose their hard-earned money. Measures like 2FA (a type of multi-factor authentication) or using a cold wallet can help keep crypto secure.
Learning which crypto exchanges are the most secure and trustworthy is also important. Our recent study explores the current state of crypto exchange security and includes a list of the best exchanges. We based our rankings on the security practices and options for each exchange and consumer sentiment from our survey of over 1,000 Americans. Keep reading to learn more about crypto concerns, exchanges, and account security.
Traders search for safety
Crypto exchanges are online platforms where people trade digital currency. A look at recent Google searches revealed a concerning rise in people searching for how to scam, steal, or hack crypto and NFTs (non-fungible tokens). We also observed an uptick in traders looking for the best NFT and crypto security.
If you’re concerned about the safety of your money and personal information when trading crypto, you’re not alone. Another recent study revealed that security is the top concern among traders. They see a lack of security as the biggest problem affecting the current crypto market—and they’re not wrong. According to the FTC, consumers lost at least $329 million to crypto scams in just the first quarter of 2022—nearly half of what was lost in all of 2021!
Our research found multiple issues among recent keyword searches that signal a cause for concern. We observed the highest increases for inquiries about scamming or stealing NFTs (up 191% and 170%, respectively). Would-be thieves also worried about what might happen if they were caught: Searches for “NFT scammer punishment” rose 172% in the last 12 months. Searches for “how to scam crypto” were up 127%.
Traders appeared aware of recent threats to security as we saw significant bumps for the search terms “safest NFT wallet” (+1445%) and “most secure NFT” (+463%). Inquiries into cold storage options and crypto wallet 2FA were also higher. Clearly, NFT and crypto security are a top priority for investors today.
Ranking the best exchanges
Selecting a crypto exchange is just as important as choosing the digital coins you want to buy. We ranked the security of the most popular exchanges according to a variety of factors including authentication options, insurance coverage, and customer support accessibility (see the “Methodology” section at the end of this article for a full description of our methodology). Our research shows these are the most trusted names in the crypto business.
Knowing which crypto exchange is safest is vital in the crypto wallet security game. According to our research, Crypto.com ranked number one as the safest exchange. Crytpo.com‘s high name recognition and account security rating made them hard to beat. US-based FTX was the next highest-ranked exchange, while user-friendly Gemini ranked third.
We also wondered if the presence of an NFT marketplace affected the security of the exchange and people’s perception of each exchange. Let’s look at the rankings of the best exchanges with or without a place to trade NFTs.
Crypto.com and FTX again took first and second place in our rankings for exchanges that include an NFT marketplace, while Binance saw a bump from sixth to third place. Gemini became the leader of the pack, ranking first among the best exchanges without NFTs. Bitstamp and WhiteBIT came in second and third place, respectively.
Consumer trust matters
Our survey respondents ranked Binance as the most trusted cryptocurrency exchange overall. Gen Zers slightly preferred Coinbase and ranked it as their number one most trusted exchange, but overall, the survey respondents thought Coinbase was the second most trustworthy exchange. This was despite the fact that it ranked seventh for security. And while Crypto.com dominated our earlier rankings, survey respondents ranked it third place here.
Crypto safety measures
Many people trust that a strong password will keep prying eyes away, but it’s simply not enough as there’s no such thing as an unhackable password. There are multiple ways to secure digital assets, but are investors using them?
Our research continues to give insight into the nature of crypto security. Nearly two in five crypto owners are worried that their holdings could be compromised by an account security breach. Thirty percent of crypto owners reported being victims of a crypto account security breach, losing over $160 on average. The youngest investors (Gen Zers) reported even higher losses—almost $175 per breach. Many have learned that tools like cold wallets—crypto wallets that are not connected to the internet, and are at low risk of being compromised—are necessary to keep crypto safe.
It’s also vital to access crypto wallets only with a secure and private internet connection, never over public Wi-Fi. Saving passwords on a computer browser or sharing them with others are big no-nos. Our survey results show that 63% of crypto owners have at some point forgotten the password to an account or wallet that holds cryptocurrency or NFT keys, which means they could no longer access their digital assets.
Most respondents agreed that multi-factor authentication (MFA) was the best practice for account security, with 56% saying they were using this strategy. However, MFA-protected accounts aren’t immune to breaches. For example, a January 2022 attack stole over $300 million from exchange accounts protected by MFA. New advances in security technology, like passwordless MFA, could offer exchanges and those who trade on them even stronger protection. The next most common security practices were storing crypto on multiple wallets or backup wallets.
What we learned
Whether you’re new to the cryptocurrency world or an experienced investor, it can be difficult to know which exchange is best for your needs. While our survey respondents trusted Binance the most, Crypto.com, FTX, and Gemini ranked as the best exchanges overall. Crypto and NFT security threats are increasing, so it’s more important than ever to secure your accounts. We hope this report helps you better understand how to keep your digital assets safe from bad actors on crypto exchanges.
Survey data included in this analysis came from a survey of 1,000 crypto investors and NFT owners over 18 years old. For open-ended questions, we removed outliers. We developed these rankings based on manual research into the security practices and options for each exchange coupled with consumer sentiment from our survey, as shown below. Each exchange received a score on a binary, three-point, or five-point scale for each metric. To calculate each exchange’s final score, each metric was given equal weight.
- Crypto insurance coverage in case of theft
- Two-factor authentication availability for user accounts
- SSO authentication availability for user accounts
- Biometric authentication availability for user accounts
- Account recovery accessibility
- Customer service accessibility
- Cold storage reserves
- Consumer sentiment
We collected search trend and volume data via keywordtool.io in June 2022.
About Beyond Identity
Beyond Identity’s mission is: change the way the world logs in by empowering all people and business to securely, privately, and effortlessly authenticate and control their digital identities.
Beyond Identity verifies users by cryptographically binding identities to devices. Instead of passwords, users download the Beyond Identity Authenticator and set up their secure, device-bound credential for zero-friction passwordless authentication.
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