What better way to celebrate Cybersecurity Month, namely October, than diving into one of the hottest topics of the moment – the online crypto exchange and provider? As the crypto market expands, rising from a humble $300BN in the pandemic’s wake to an astronomical $3TN in premature 2021, so does the cyber threat landscape. Even if the crypto market experienced losses in the previous years, cumulating with a market worth $1.7TN as of last year, cyber risks and scams exist, and most of the attention now goes to the quality of the investing and trading platform chosen.
Bitcoin’s prices are up 148% YTD this year, having the mammoth on track for its 2nd successive year of substantial earnings. This explains why more and more people look to buy Bitcoin with bank transfer and why sizeable attention must be directed towards the financial service provider one opts for, since the number of suppliers worldwide is anything but small.
Have you spotted the following red flags in your online crypto exchange? Is it high time you turned your attention to a safer, more reliable one?
Security
The cryptocurrency industry is somewhat newfound and in continuous development, so it’s normal to come across all sorts of crypto exchanges, such as those offering poor security feats or being less upfront than others. This doesn’t mean you should remain complacent about this. If you’ve stumbled upon a crypto exchange that appears to prioritize your safety and cybersecurity, but their security measures aren’t top-notch, they lack Two Factor Authentication (2FA), and have a poor reputation due to hacks and data breaches, you have just enough reason to shift to another provider.
While numerous trustworthy and popular exchanges exist, some may indulge in manipulative operations. Therefore, it is vital to do your due diligence and only work with businesses that have a healthy reputation, robust security measures, and straightforward policies. More specifically, look into those that focus on customer satisfaction and allow the public to see visible, transparent, and honest reviews.
Regulation
Regulations and laws may change rapidly in the crypto space and there’s no solid regulatory infrastructure to set things clear. Take the U.S.’s case, for instance. While this is one of the hottest topics of the moment, being present even in the debates regarding the presidential elections, there’s still confusion as to what body should regulate crypto assets or how such a scheme should look like.
While zero regulation may sound appealing to investors, it’s important to realize that this lack of control opens room for more threats and scams. Consequently, thorough regulation in developed markets can offer the needed framework for institutions and organizations to pour money in cryptos and push the crypto market further.
Search for online exchanges with a solid track record and compliance with sensible regulatory standards to prevent scams and legal hurdles. Notably, remember that regulated cryptocurrency trading exchanges could have harder requirements to accomplish and tests to pass, which ultimately will work in your favor. A higher bar to jump means your funds may enjoy a higher level of security.
Frauds and scams
The crypto market is under development and still unevenly regulated, meaning that if anything bad happens with your funds, account, or data, you may only have the cryptocurrency exchange you’ve been used to turn to. No authority or government may help you out, which is why it’s essential to select a crypto exchange that offers real services, low chances of getting scammed, and safety guarantees. While crypto exchanges don’t usually offer reimbursement for account owners if their cryptos are taken from the exchange, some providers may provide some type of compensation if they deem the user’s loss their fault.
A scam may have you invest in a spoofing crypto project with no real substance. Another one may have you disclose personal data that works as a bridge to open their room into your wallet and steal your assets. Even crypto exchanges can be vulnerable to such threats, all the more, since hackers’ approaches get increasingly sophisticated by day. As an investor, you should take steps to safeguard your hard-earned money. Suppose a project promises you the moon, which sounds too good to be true. Take a step back and reconsider your move. Anything that sounds too heavenly is, more often than not, a scam.
Liquidity
Liquidity is one of the hottest terms when it comes to crypto exchanges, boiling down to the ease of purchasing or selling a cryptocurrency whenever the investor intends to. Your buy/sell order should occur in an instant, and regardless of the time taken to process the transaction, the price of your investment shouldn’t be affected.
The higher an exchange’s liquidity, the smoother your transactions and the lower the exposure to slippage. Some of the most critical and easily revisable metrics disclosing an exchange’s liquidity adequacy are its market depth, volume, and the superiority of its trading conditions, including lower execution risks and decreased slippage. While liquidity may be approximated in different ways, it’s safe to say that you should find relevant data about your eyed crypto exchange online.
Opt for an online exchange that dominates the liquidity game and boasts one of the highest average trading volumes to ensure your orders are carried out on time and at reasonable prices.
More aspects to look into
The four aspects outlined above speak volumes about the online crypto exchange in which you show interest. Besides those, more signs may tell if you’re dealing with a reliable and trustworthy or sketchy and replaceable provider.
Look into the provided trading tools and features for seasoned investors and prioritize them. Examples include but aren’t limited to order types, margin trading, charting tools, stop-loss options, and so on.
Lastly, check the exchange’s fee structures, the promptness of customer support, and other customers’ experiences with the service. By the end of this journey, you should already know if it’s safe to proceed with the respective trading platform.
Disclaimer:
CBD:
Qrius does not provide medical advice.
The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) outlaws the recreational use of cannabis products in India. CBD oil, manufactured under a license issued by the Drugs and Cosmetics Act, 1940, can be legally used in India for medicinal purposes only with a prescription, subject to specific conditions. Kindly refer to the legalities here.
The information on this website is for informational purposes only and is not a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or another qualified health provider with any questions regarding a medical condition or treatment. Never disregard professional medical advice or delay seeking it because of something you have read on this website.
Gambling:
As per the Public Gambling Act of 1867, all Indian states, except Goa, Daman, and Sikkim, prohibit gambling. Land-based casinos are legalized in Goa and Daman under the Goa, Daman and Diu Public Gambling Act 1976. In Sikkim, land-based casinos, online gambling, and e-gaming (games of chance) are legalized under the Sikkim Online Gaming (Regulation) Rules 2009. Only some Indian states have legalized online/regular lotteries, subject to state laws. Refer to the legalities here. Horse racing and betting on horse racing, including online betting, is permitted only in licensed premises in select states. Refer to the 1996 Supreme Court judgment for more information.
This article does not endorse or express the views of Qrius and/or its staff.
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