As was portrayed in the last blog article about Cryptocurrency Safety, the idea of safety in the cryptocurrency space is rather complex. This is due to the fact that it can be perceived on many different levels. For the most part, the most crucial one for the investors is the safety of exchanges. Has the safety of cryptocurrency exchanges in the past couple of years increased, or is this still the biggest threat to the cryptocurrency world? If this is true, is it possible to mitigate the risks and increase safety by trading on cryptocurrency derivatives exchange?
We have mentioned in the previous article the Kucoin Hack of 2020, which was by far the biggest cryptocurrency theft of the last year, but in actual fact, the number of hacks of this is gradually decreasing. During the previous bull run, which happened around the end of 2016 and the start of 2018, several exchanges had problems with maintaining proper security. The most common types of hacks were the exploitation of lacking security, draining of funds of pools or flash loans. However, these are mostly connected to DeFi attacks. Problems were visible on exchanges such as Bithumb, CoinCheck, CoinDash, and NiceHash (Hui, 2020).
Some of these hacks were more severe than others. Nonetheless, security is a threat to most cryptocurrency exchanges. Bithumb, Bitfinex, Poloniex, Cryptopia, Kucoin, or even Binance are some of the biggest cryptocurrency exchanges to date and yet all of them have been hacked at some point. On the plus side, the number of major crypto exchange hacks has decreased significantly between 2019 to 2020. There were about 12 major cryptocurrency exchange hacks in 2019, but that number subsequently decreased to 5 in 2020. The total amount of the stolen funds was nearly the same in those two years, but the Kucoin Hack of 2020 was by far the biggest contributor to this. Most of the stolen funds from the Kucoin hack were retrieved, which left a bittersweet taste in the mouths of investors (A Comprehensive List of Cryptocurrency Exchange Hacks, 2020).
The need to find a safe trading environment is incredibly high. Like many other exchanges, safety is one of the necessary services that BingX offers. Being one of the younger exchanges in the industry, BingX has yet to prove itself regarding its ability to be resilient to hacks. However, this derivatives exchange is on the path of being one of the most secure exchanges in the space. Until now, there haven’t been any reported security breaches that would undermine the reliability of this crypto derivatives exchange.
Moreover, the sole fact that BingX is a cryptocurrency derivatives exchange makes the exchange less prone to exploits or hacks that would drain their cryptocurrency vaults. This form of attacks is on a rise due to the shift in the cryptocurrency sector, where more projects are based on Decentralized Finance (DeFi) solutions, which are not perceived as safe yet. However, since BingX offers only trading of derivatives, it mitigates potential threats of such attacks by offering trading products and services, which can not be drained or exploited (Thompson, 2020).
Additionally, BingX goes the extra mile to provide the best services to its clients when it comes to the security of their investments. That is one of the reasons why the exchange has partnered with SlowMist (slowmist.com), which is a third-party security auditing company. SlowMist has already helped more than 70 exchanges to better protect their clients and help with the overall security of the exchanges. They offer a vast number of different services such as exchange security audit, wallet security audit, blockchain security audit, security monitoring, red teaming, or defense deployment.
Moreover, this partnership helps BingX to offer a bug bounty to anyone who finds a security problem in the exchange. The price for exposing the vulnerability of the exchange can be anywhere between 50 to 4 000 USDT depending on the severity of the problem and the nature of the bug that is found.
These small differences, such as establishing a partnership with a security auditing company or the bug bounty offer, clearly show the difference between the exchanges that take safety as one of their main priorities. Therefore, if anyone wants to choose a safe environment to trade derivatives of well-known cryptocurrencies such as Bitcoin and Ethereum then, BingX is your crypto haven.
Hui, A. (2020, 9 26). Over $280M Drained in KuCoin Crypto Exchange Hack. Retrieved from Coindesk: https://www.coindesk.com/hackers-drain-kucoin-crypto-exchanges-funds
A Comprehensive List of Cryptocurrency Exchange Hacks. (2020, 2 13). Retrieved from Selfkey: https://selfkey.org/list-of-cryptocurrency-exchange-hacks/
Thompson, P. (2020, 12 31). The DeFi hacks of 2020. Retrieved from coin Geek: https://coingeek.com/the-defi-hacks-of-2020/