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CDx Power Rankings — Crypto Exchange Risk (November 2018)
Binance finishes outside the top 5, Bitfinex ranking surprises many, and Kucoin is deemed high risk.
Since 2011, cryptocurrency exchanges have lost $12.6 billion because of hacks, scams, and regulatory seizures. When this happens, exchange customers usually pay the price.
Yes, $12.6 billion.
At CDx, our mission is to make crypto safer for everyone. Understanding exchange credit risk is hard, so we built a predictive model that provides credit scores and rankings on each exchange’s risk of defaulting because of a hack, scam, etc.
Credit risk is the risk that an exchange is unable to give your money back.
Ranking are determined by four factors
The rankings are based on a combination of factors from four categories (the report and Andrew’s methodology article goes into more detail):
- Cybersecurity — Unsecure exchanges are more likely to get hacked
- Regulatory Risk — Less compliant exchanges are more likely to get shut down
- Track Record of Hacks — Previously hacked exchanges are more likely to get hacked again
- Exchange Volume — High volume exchanges are more likely to repay customers after a hack
Good News: Safe, regulated exchanges are available
Binance and Poloniex are both landed in the top 10, but out of 100 exchanges, only 3 managed to gain a rating of AA or higher.
CDx Report Preview — Top 100 Cryptocurrency Exchange Credit Rankings
Although regulated exchanges performed well, the riskiest exchange to store digital assets on was also regulated.
Bad News: Popular exchanges fail basic security practices
A number of popular altcoin exchanges rank in the bottom 25, including Liqui and Cryptopia.
CDx Report Preview — Top 100 Cryptocurrency Exchange Credit Rankings
The second most popular exchange by volume ranked outside of the top 20, thanks to a recent hack and weak security practices.
CDx Power Rankings — Crypto Exchange Risk (November, 2018) was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.