Is Binance Safe?
Cyber-security is an integral part of the crypto industry and one can never go over the top with the enforcement of security measures.
The fact that there were multiple successful hacker attacks in the past has been reason enough for traders to worry about the safety of their funds whenever they’re using a crypto platform.
Binance is one of the largest cryptocurrency exchanges on the market and the number one choice for thousands of users worldwide. If you happen to be one of them or intend to join the Binance community in the future, you probably want to know whether or not Binance is safe to trade on.
Binance has been around in the crypto world for three years, starting in 2017, when it was launched as a cryptocurrency exchange by developer Changpeng Zhao (CZ), in Hong Kong. China is known for the restrictive financial laws and regulations, which is why Binance quickly relocated to crypto-friendly Malta.
As crypto to crypto exchange only, Binance supports the most prominent coins including BTC, BCH, ETH, XRP, LTC, USDT, and its native token BNB. This token is really useful, as it allows users to pay their transaction fees with a 50% discount.
In September 2019, Binance opened its US subsidiary Binance.us that has a compliance framework in line with US financial regulations.
The rest of our guide puts into focus the level of security and safety measures provided by Binance. If you want to know more about the exchange’s features, you’re welcome to check out our in-depth Binance Review.
How to Secure Your Account With Binance
Binance is considered to be a trustworthy exchange by members of the crypto community, thanks to the great variety of security methods and the platform’s commitment towards preventing any unauthorized activity.
In March 2018, Binance nearly fell prey to a hacking attack that might have cost them (and their users) thousands of dollars. Using a phishing scam, the hackers tried to collect users’ login information and use them to make a profit for themselves by selling Viacoin (a currency whose value was at its peak back then).
Luckily, Binance’s security system was able to identify the fishy activity before the hackers got their hands on any sensitive data. Binance’s prompt reaction attested to the integrity and readiness of the exchange to protect its users.
This is probably the best-known security feature used across all crypto exchanges. Two-factor authentication, or simply 2FA, is when you use two factors or locks to add another layer of protection to your account.
A factor can be represented by a password devised by the user him-/herself, a mobile device owned by the user, or biometric traits (e.g. the user’s fingerprint). On Binance, you must choose a password as your first factor and then either select an SMS or Google authentication code.
Most users prefer activating the SMS authentication because they find it convenient for the system to send them a verification code via SMS. However, phones can be easily compromised, which is why Binance recommends activating the Google Authenticator instead to receive a secret backup key with which the app generates one-time passwords (OTP).
Recently, Binance has introduced a third 2FA option called Universal 2nd Factor (U2F) that allows users to protect their accounts with hardware devices such as YubiKey.
Withdrawal Address Whitelist
Another great feature provided by Binance is the “Withdrawal Address Management” that lets you input and lock the wallet addresses to which you want to withdraw your funds. To add a new address, you’ll be asked to confirm it via email. This means that your account is protected from unauthorized access from third-party addresses.
To activate this feature, find and click on the Withdrawal Address Management section on your dashboard and enable the “Whitelist” option.
Level 2 Verification
We suggest you also complete the Level 2 Verification on your account because you not only access a higher withdrawal limit, but you also add another layer of protection with your personal information.
The activation requires users to state their full name, address, postal code, city, and country. Next, you’ll be asked to provide a photo ID. Once you’ve completed all the steps, it will take one to two days for Binance to verify your account.
Trust Wallet is the official digital wallet designed by Binance that allows users to store their funds and protect them from malicious actors. You can store all major cryptocurrencies and ERC20 tokens. The wallet is also available for both Android and iOS users.
Secure Asset Fund for Users (SAFU)
Finally, we’ve come to the most exciting feature pioneered by Binance in 2018, the Secure Asset Fund for Users (SAFU). Think of SAFU as this huge reserve vault, accessed by the platform in case of security breaches.
When collecting the transaction fees, Binance pools 10% of the whole amount and transfers it to its security fund. Binance is known for the high trading volumes, which means that SAFU is never short of funds.
After a couple of unsuccessful attacks, Binance was hacked in May 2019 in a large-scale security breach. As a result, the exchange lost around 7,000 BTC worth over $40 million with only one single transaction!
The founder Changpeng Zhao informed the public in an official post: “Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks.”
Luckily, Binance was able to cover the full amount using SAFU funds, meaning that no user was at a loss. Following this incident, Binance and its team have tried their best to restore the faith of its users.
Judging by the measures that Binance has to offer to its users and the quick and transparent manner in which it has successfully dealt with hacker attacks in the past, we wholeheartedly recommend using this crypto exchange.
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Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.