There are many cryptocurrency platforms, and Binance is one of the larger ones. But is it an option you can trust with your investments?
Binance is unarguably one of the world's most popular and largest cryptocurrency platforms. Since entering the cryptocurrency scene in 2017, it has eclipsed most of its competitors, establishing itself as a household name among cryptocurrency users globally.
However, being a household name doesn't necessarily mean being a safe cryptocurrency platform. So, is Binance Safe? Can you trust the platform with your virtual assets? Let's take a look.
Although security strategies employed by cryptocurrency platforms have positively evolved over the years, the crypto industry continues to grapple with a lot of security issues. A month barely passes without hearing of a breach or two on a cryptocurrency platform somewhere in the world. These breaches are costly, not just to the platforms but to the end users as well.
Whether big or small, the size of a crypto platform or its security strategies wouldn't deter hackers from coming for it. In 2020, the popular Seychelles-based crypto exchange platform, KuCoin, lost $281 million in a hack. Similarly, the less-known Poly Network suffered a $610 million breach in 2021. Recently, the Nomad Bridge also suffered security breaches which saw nearly $200 million stolen. Any platform, no matter the size, can be targeted.
For the Poly Network's breach, at least, the hackers subsequently returned the stolen funds, but this isn't always the case. The possibility of losing your funds forever is very real. However, this doesn't mean crypto platforms aren't safe—they try to be. Different crypto platforms employ different strategies to protect their platforms and ultimately your virtual assets.
As a result, some platforms are more susceptible to hacks than others. This is why it's important to ask questions about the safety of a crypto platform before going all in.
As recently as October 6th, 2022, Binance had its share of security breaches. In an interview with CNBC, Binance CEO Changpeng Zhao confirmed that the crypto giant suffered a $570 million hack, although the company was able to subsequently minimize the loss to less than $100 million. So, if Binance suffers hacks as well, can you trust Binance with your funds?
For starters, the funds of Binance users are safe, despite the latest hack. Apart from the core blockchain security strategies it uses, Binance has other ways to protect your money. One such way is the Secure Asset Fund for Users (SAFU). SAFU is an emergency insurance fund that holds a percentage of all trading fees on the Binance platform to indemnify users in case of a financial loss.
So, if a hack was to occur, and users' funds are stolen, the Secure Asset Fund would be used to reimburse users for the loss. When Binance suffered a $40 million hack in April 2019, all affected users were duly reimbursed.
Of course, SAFU isn't the only security card Binance has to play. There are several other accounts and platform security features in place to protect your funds. Account-based features like device restriction, address whitelisting and two-factor authentication make it incredibly hard for malicious actors to compromise your Binance account. If you have a Binance account, here's how to secure your Binance account with two-factor authentication.
Also, all US dollars you have on Binance are insured by the US Federal Deposit Insurance Corporation (FDIC). So, if something were to somehow happen to those funds, the FDIC would cover them. Once the US dollars are converted to cryptocurrency, Binance's alternative safeguards kick in.
If you're a United States citizen, you'd likely be using the special US version of Binance. The US restricted Binance trading activities for US citizens. The company responded by partnering with a US company to launch Binance.us, a U.S variant of Binance that is registered and compliant with US laws.
Just like the global version of Binance, Binance US has several security features in place to safeguard the funds of its users. It's typically under a lot of regulatory and security scrutiny, perhaps more than the international version, ensuring it stays in compliance with US laws.
According to a report by Xiamen SlowMist Technology, a reputable security analytics firm, the entire Binance platform performs "excellently" in cybersecurity checks. To put in simple terms, Binance's security measures supersede most platforms in the cryptocurrency industry.
Although Binance has had a few security failings in the past, the company is typically transparent about its failings and takes action to fix security loopholes.
So, if you're new to crypto and wondering whether Binance is safe, Binance is not perfect, but it's one of the safest cryptocurrency exchanges you can trust with your funds.
Maxwell is a loyal Android fan who writes on a wide range of Android and smartphone topics for MakeUseOf. He’s been writing about tech innovations for 8 years. When’s he’s not neck-deep in exploring the latest tech innovations, he’s probably seeing a TV show.
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