Questions like Which Crypto Exchanges have Insurance are highly essential for the security of your funds because this is still a new and relatively unregulated industry. Almost all bank or brokerage accounts have insurance and other protections in place to keep your money safe, the same can’t be said for digital currency exchanges.
Some high-profile exchange hacks have shown how easy it is to lose your money. This is one of the main reasons why security is often a big concern when buying digital currencies. If you plan on investing in cryptocurrency, it’s a good idea to use an exchange that goes out of its way to protect your investments.
Let’s find out!
Crypto Insurance Policy in Exchanges
Crypto insurance policy is a policy that protects investors from losses caused by cryptocurrency scams and cyber attacks. Some exchanges already have insurance in place to protect their customers’ digital assets.
The majority of the major cryptocurrency exchanges have strong security programs. User-level security, such as two-factor authentication (2FA), is fairly common. When you enable 2FA, you’ll be required to provide additional information whenever you log in, such as an SMS code.
However, users should look for an exchange that will go above and beyond to protect their Bitcoin and other currencies. Here are two additional security measures to look for:
When you deposit money into a bank account, it is usually FDIC-insured, which protects it from theft or bank failure. FDIC insurance is not available for cryptocurrency exchanges. However, exchanges that take security seriously provide additional protection for your cryptocurrency. As a result, if it is stolen during the exchange, you may be compensated.
Exchanges must keep some currency in “hot storage,” which means it is online and accessible. You want a secure exchange that keeps the majority of assets in cold storage. That means it’s offline, frequently air-gapped, and difficult to physically access.
Which Crypto Exchanges have Insurance Summary
|Binance||Binance insurance fund is known as Secure Asset Fund (SAFU). SAFU is supported by 10% of trading fee revenue. This fund is used to protect the assets of users in the event of a security breach.||Majority of coins held in cold storage.|
|Gemini||Gemini says it has $200 million in crypto insurance coverage. It also insures the coins in cold storage and allows customers to buy additional crypto insurance.||Majority of coins held in cold storage.|
|Crypto.com||Crypto.com says it has secured a total of $360 million in cold storage insurance against physical damage or destruction and third-party theft.||100% of user cryptocurrencies are held offline in cold storage.|
|Coinbase Pro||Coinbase Custody Trust Company is SOC 1 Type II and SOC 2 Type II compliant and are also covered by the industry leading insurance policy totaling $320 million in coverage.||98% of currency held in cold storage.|
|BingX||BingX has implemented an insurance fund mechanism as a financial guarantee to maintain normal contract transactions and compensate for losses caused by unforeseeable risks||Stores a portion of its digital asset in cold storage wallets.|
Which Crypto Exchanges have Insurance?
Many large exchanges offer insurance for their users. Below displays some of the crypto exchanges with insurance for individuals:
Binance was founded in June 2017 and has since grown to become the world’s largest cryptocurrency exchange. The platform has established itself as a trustworthy member of the crypto space, allowing users to buy, sell, and store their digital assets, as well as access over 350 cryptocurrencies and thousands of trading pairs.
Binance protects user funds by securing its platform with stringent protocols and cutting-edge technical measures. Real-time monitoring and a 360-degree risk management system, for example, as well as advanced data privacy tools and end-user security education, are all available. The vast majority of user funds and assets are safely stored in cold storage facilities that are not connected to the internet.
Every withdrawal attempt, password reset, two-factor authentication reset, and email address change is analyzed by its risk management system. Unusual activity results in a 24-48-hour suspension of withdrawals. It also has a wallet and personnel infrastructure with advanced security measures, such as multi-signature and threshold signature schemes (TSS), to ensure the security and integrity of its users’ funds.
The FDIC insures Binance’s user cash deposits. If there is ever a security breach, any cash holdings you have on either of these exchanges will be reimbursed. Binance has established its own insurance fund to protect its users. The fund is known as the Secure Asset Fund for Users (SAFU).
The SAFU is supported by 10% of trading fee revenue. This fund is used to protect the assets of users in the event of a security breach on Binance’s website. However, the fund does not cover hacks against personal accounts, so keep your passwords safe and use 2-factor authentication.
Gemini is a cryptocurrency centralized exchange (CEX) based in New York that is regulated by the New York State Department of Financial Services and is available in all 50 U.S. states and over 60 countries. The Gemini exchange went live in October 2015, and the platform was designed with security and compliance in mind.
Gemini is a licensed New York trust company that is subject to regular bank examinations and cybersecurity audits by the New York Department of Financial Services.
Gemini provides industry-standard security features such as two-factor authentication, wallet address whitelisting, and the ability to review and approve login devices. Gemini is SOC 2-certified, in addition to its security features, highlighting the platform’s commitment to security and compliance.
This exchange also provides FDIC insurance for deposits up to $250,000 in US dollars, as well as digital asset insurance for funds held in its hot wallet, with over $200 million in crypto insurance coverage. It also insures the coins while they are in cold storage and allows customers to purchase additional cryptocurrency insurance. Its policy does not cover any losses incurred as a result of unauthorized access to your account.
In June 2016, Crypto.com was founded in Hong Kong, and three years later, the Crypto.com Exchange was launched. The platform’s headquarters are in Singapore, and it has more than 70 million customers in more than 200 countries. Cypto.com claims to always prioritize security. Their processes include security and data privacy assessments, so you can be confident that your funds are secure.
Crypto.com is the first cryptocurrency company in the world to have ISO 22301:2019, ISO/IEC 27701:2019, ISO/IEC 27001:2013, and PCIDSS v3.2.1 Level 1 compliance, and has been independently assessed at Tier 4, the highest level for both NIST Cybersecurity and Privacy Frameworks, as well as Service Organization Control (SOC) 2 compliance.
Crypto.com has also hired Kudelski Security, a globally recognized security consulting and auditing firm, to stress test and audit its core Blockchain systems. Furthermore, all user cryptocurrencies are held offline in cold storage, making them impervious to hacking.
Ledger has partnered with Crypto.com to integrate its institutional-grade custody solution, Ledger Vault. In addition, we make use of hardware security modules (HSM) and multi-signature technologies. The platform also employs a cold wallet insurance fund in the event of a fund loss. Arch Underwriting underwrites a $100 million direct insurance policy at Lloyd’s Syndicate 2012.
If you live in the United States, your USD balances are held at Metropolitan Commercial Bank, an FDIC-insured depository institution. Metropolitan Commercial Bank ensures your USD balances up to $250,000. You retain ownership of those funds in Metropolitan Commercial Bank accounts, which means Crypto.com or its creditors cannot seize them.
In addition to its original Coinbase platform, Coinbase launched the Global Digital Asset Exchange (GDAX) in 2017 for active traders. GDAX was later renamed Coinbase Pro.
In the United States (USD), the European Union (EUR), and the United Kingdom, Coinbase Pro provides crypto-to-native currency trading pairs (GBP). Furthermore, the exchange has over 75 million verified users and supports crypto-to-crypto trading pairs in over 100 countries.
Coinbase Pro has over 130 tradable assets, low fees for high-volume trades, advanced order types, and an easy-to-use platform. Users can also benefit from industry-leading security features that are designed to help them protect their cryptocurrency holdings.
In addition, Coinbase pro keeps 98% of its customers’ funds in cold storage. The remaining 2% is kept online and is covered by Coinbase’s insurance policy, which may cover losses caused by cybersecurity breaches. Among other things, it supports two-step verification, biometric fingerprint logins, and AES-256 encryption for digital wallets.
Their systems and processes are audited on a regular basis: Coinbase Custody Trust Company is SOC 1 Type II and SOC 2 Type II compliant and is also covered by the industry-leading insurance policy totaling $320 million in coverage. In addition to its security features, the FDIC insures all USD cash balances held in Coinbase’s custodial bank accounts up to 250k per individual.
BingX is a cryptocurrency social trading exchange that provides spot, derivatives, and copy trading services to customers in over 100 countries. It has been in operation since 2019, and it continues to build on its long track record of safety and security.
BingX regards [platform security] as its lifeline and has invested a plethora of manpower and resources to protect users’ assets. BingX has withstood the test of time and the market due to its strong security system. BingX has been through multiple extreme market conditions and has ensured the security of digital assets with zero crypto/wallet theft or loss since its inception.
Internal and external risks are the primary sources of security threats to exchanges. BingX has developed a stringent security system to thwart any potential threats. The exchange has passed the security audits of well-known security companies such as CertiK and SlowMist.
With world-class experts in security architecture, web security, App security, terminal security, red-blue confrontation, blockchain security, and other fields, BingX effectively thwarts more than 9 million attack traffic per day, ensuring the security and stability of billions of dollars in daily transactions.
BingX’s leading market depth from multiple liquidity providers ensures a smooth and stable operation even in extreme market conditions. Apart from supporting the custody of cold and hot wallets, BingX has adhered to a stringent security system that closes zero-day security holes and regularly reviews operation and maintenance databases.
BingX also monitors any risks posed to users by cryptocurrency fluctuations. BingX extracts Mark Prices from major spot exchanges (Huobi, Binance, and OKX) and implements dynamic price abnormality monitoring. Any anomaly in any exchange will be immediately removed in order to protect users from volatile cryptocurrencies.
Above all, BingX has implemented an insurance fund mechanism as a financial guarantee to maintain normal contract transactions and compensate for losses caused by unforeseeable risks. There is also a bug bounty program for cyber security researchers who provide information on system vulnerabilities.
Which Crypto Exchanges have Insurance: Conclusion
If a crypto brokerage insures your funds on its exchange, you can trust that the exchange gives an extra mile to make sure your funds are secure. Even if there were a security breach, you know that your funds will be reimbursed.
Therefore, it’s worth noting that cryptocurrencies including Bitcoin, Litecoin, and Ethereum are not subject to Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation protections.
Furthermore, the fund does not cover hacks against personal accounts, so keep your passwords safe and use 2-factor authentication. To keep your digital assets safe, it is recommended that you use reputable and trusted exchanges with cold wallet integrations.