As exchanges are big targets for hackers, security measures need to be strong and without vulnerabilities. However, there’s unlikely to be a perfect exchange without these potential security risks, as hackers become more sophisticated in their techniques. They’re motivated to be, too, since the reward is so massive, as noted by CoinDesk. There are security measures some exchanges use to protect your cryptocurrency, but they’re not perfect.
One of these measures is two-factor authentication (2FA). This prevents someone from stealing your crypto even if they have your password. While this is necessary for protecting your account, it doesn’t guarantee that your coins will be safe. If there are exploitable vulnerabilities on the server side of things, someone looking to steal your crypto could potentially bypass 2FA altogether, as explained by Forbes.
Another method that increases security is cold storage. This means that the exchange stores most of your crypto offline, making it harder for someone to get ahold of it. If an exchange offers this through its service, that’s a good sign. Even in cold storage, though, it’s not out of the clear yet. As you use cold storage, information about that usage, which is stored online, can point hackers in the right direction for gaining access. Despite these methods for keeping crypto safe, no exchange is perfect, and that’s why it’s unwise to store most or all of your assets on these platforms.
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