Prominent cybersecurity firm Group-IB has graded the security of top crypto exchanges, TheNextWeb reported November 6.
According to research conducted by the Moscow-based firm in partnership with crypto asset insurance platform CryptoIns, the Kraken platform is the safest crypto exchange. In contrast, OKEx, as well as Huobi Pro and CoinCheck are the riskiest crypto trading spots.
Group-IB made its determinations with a newly developed assessment system that calculates insurance premiums to cover cryptocurrencies held by major exchanges.
CryptoIns, which is supported by Swiss insurance broker ASPIS S, is now offering its insurance services to dozens of major crypto exchanges. The new insurance policy purportedly covers losses from “cyber-attacks on exchange software, theft, fraud and illegal actions of crypto exchange personnel.”
The risk assessment for crypto exchanges takes into account factors such as technical security levels, the reliability of basic storage, passwords, as well as clients’ personal data. The framework also considers risk management, as well as Know Your Customer (KYC) and Anti-Money Laundering (AML) policies.
Group-IB and CryptoIns have not released the precise metrics used when determining the security of an exchange, reportedly in the interests of maintaining confidentiality.
Cryptocurrency held on Kraken is the cheapest to insure
The insurance framework sorts cryptocurrency exchanges into four groups, in order of risk. Group-IB deemed exchanges in the first group to be the most secure, while considering the fourth group to be completely uninsurable.
The base insurance rate is 2.5% per quarter, with a discount applied depending on the group (with a maximum of 50% discount).
The only cryptocurrency exchange Group-IB deemed worthy of the most secure category is the long-serving Kraken.
“According to our estimates, Kraken is the most secure exchange, with 1.25% insurance rate,” – Group-IB told Hard Fork.
The second group includes Bittrex and Coinbase Pro, with cryptocurrency kept on these exchanges demanding a 1.5% insurance premium for protection.
Digital assets on cryptocurrency exchanges Binance, Bitfinex, Bithumb, Bitmex, Localbitcoins, MyEtherWallet, and Poloniex were all assigned premiums of 1.9%.
The least secure cryptocurrency exchange Group-IB analyzed was Yobit, which was removed from the list altogether just before going public with its insurance framework. Other excluded exchanges include Zaif, Bitstamp, TopBTC, and Bit-Z.
The maximum amount of cryptocurrency users are able to be insure is the equivalent of 15 BTC, with premiums payable in up to 100 different coins.
CryptoIns says it will issue insurance payouts in Bitcoin. Full-year coverage is also available, with the base premium costs increasing proportionally with the period of the coverage.