Insurance study finds Kraken, Bittrex, Coinbase Pro among safest exchanges

Getting your Trinity Audio player ready...

Insurance study finds Kraken, Bittrex, Coinbase Pro among safest exchanges

A joint venture between cybersecurity firm Group-IB and Swiss insurance broker ASPIS SA, through its CryptoIns platform, has classified cryptocurrency exchanges by insurance risk, finding the Kraken exchange to be the most secure.

According to online tech magazine The Next Web, the developers of what is claimed to be the first scoring model for security of cryptocurrency exchanges, looked at level of technical security, and reliability in storing keys, passwords, and personal data. Also considered are risk management systems and availability of anti-money laundering/know-your-customer (AML/KYC) guidelines, as well as independent ratings.

“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,” a representative of Group-IB was quoted as saying.

“According to our estimates, Kraken is the most secure exchange, with 1.25 percent insurance rate” for a period of 90 days, Group-IB said, putting the exchange in the first, most secure group.

The next group consisted of Bittrex and Coinbase Pro, with a 1.5% premium assigned to them.

The third group, with a 1.9% premium, is where most of the assessed exchanges were included: Binance, BitFinex, Bithumb, Bitmex, Localbitcoins, MyEtherWallet, and Poloniex.

In the last group were OKEx, Huobi Pro, and CoinCheck, although many more were excluded that were deemed too risky to insure at all.

The maximum amount insured by CryptoIns is about $100,000, and premium payments can be made with around 100 different cryptocurrencies.

According to the Security Affairs website, CryptoIns sees the cryptocurrency insurance market amounting to $7 billion by 2023. The insurer’s CEO Timofey Volkov said, “Currently, approximately 3,600,000 BTC are stored in user accounts on cryptocurrency exchanges, making this market highly attractive for hackers… The challenge for insurers is how to cover emerging risks for customers in a young industry formed by completely new technologies and relationships between market participants.”

A study by blockchain forensics firm CipherTrace has pointed out that 2018 is the first year where cryptocurrency thefts will amount to over $1 billion. $927 million has already been stolen in the first three quarters of the year, much of which was taken from cryptocurrency exchanges.