KuCoin Safety And Security: Is It Safe?
KuCoin Safety and Security
Blockchain and cryptocurrency technology opened up the possibility for anyone around the world to join a decentralized financial system and become their own bank. These decentralized financial systems have removed the need for 3rd party institutions and organizations to facilitate transactions between people within a network, making it a truly peer-to-peer network. However, having a financial system that doesn’t have third-party intermediaries does pose its own set of problems if a person is not careful when transacting on the network. These networks are becoming popular targets for cybercriminals. In this article, we will take a look at one of the biggest targets in the cryptocurrency space that cybercriminals like to attack: exchanges, ways that you can keep your funds safe on an exchange, as well as one of the most prominent exchange security features when we take a look at the KuCoin exchange.
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Why Are Exchanges Such a Popular Target?
Exchanges are the on-ramp and off-ramp into and out of the cryptocurrency world. They provide cryptocurrency enthusiasts from around the world with a simple way to exchange fiat currency for cryptocurrency. There are a lot of people using an exchange at any given time. This means that there is a lot of money stored on an exchange platform at any given time as well. The large amounts of funds available on exchange platforms make them a popular target for hackers and cybercriminals as the payout from an attack on an exchange is substantial.
Anyone in the cryptocurrency space will know how often you will make use of exchange platforms. So what can you do to stay safe on an exchange platform? Let’s take a look.
KuCoin Safety: Exchange Security Best Practices
The following list has to do with ways that you can ensure the security of your funds on an exchange platform. Items in this list apply to things you can do both off and on the exchange platform to secure your funds, and also lists some things to look for in an exchange platform before depositing your funds onto the platform.
Store Your Funds In Cold Wallets
This does not really apply to an exchange platform but rather to how you store your funds. A cold wallet is a cryptocurrency wallet that is not always connected to the internet. These are the safest ways to store your funds because, without a constant internet connection, a cybercriminal won’t be able to gain access to your wallet. Of course, when you want to send funds out of the cold wallet you’ll need to connect it to the internet, but this is still a lot more secure than storing your funds on a wallet that is always connected to the internet. Think of it as a way to store your cryptocurrency funds off of the grid.
Storing your funds on an exchange platform is similar to storing your funds in a wallet that is constantly connected to the internet because of the infrastructure that goes into an exchange platform. Furthermore, you also have the threat of the exchange being investigated by a regulatory authority. Normally when an investigation occurs, access to exchange services as well as exchange funds is either restricted or, in the worst-case scenario, frozen. So when looking to keep your cryptocurrency funds safe, it may be best to not store your funds on the exchange platform if you aren’t going to exchange your funds for the foreseeable future.
Enable 2 Factor Authentication
Let’s say that a cybercriminal finds out what your username and password is for the exchange platform, enabling 2-factor authentication is your last line of defense. 2-factor authentication is a security feature that either generates a random code every few seconds for you to enter before you log in, or asks you for email approval before a successful login attempt can be made. Even if a cybercriminal knows your username and password, it will be very difficult for them to hack your account if 2-factor authentication is enabled because they won’t know what your 2FA code is or may not necessarily have access to your email account to approve the login request. Most exchanges make it a requirement to enable 2FA before a person can start using the platform.
Restrict IP Addresses For Your Account
Each computer has a unique IP address that can be used to identify it in a network. An exchange platform may also monitor IP addresses transacting on an account for any unusual activity. The exchange will then notify the person who owns the account that there was some unusual activity and allow them to block their account. Monitoring and notifying of any suspicious activity on an exchange platform is a bit delayed because of the large number of accounts on the platform. This makes it a not-so-effective security measure. A security measure that can help with this is if you restrict the IP addresses that can log in and transact on your account to the IP addresses of your devices. This way, devices with unrestricted IP addresses will not be able to do anything on your account.
Enable Notifications
Enabling notifications for your account is another important security precaution that informs a user when funds are withdrawn from his or her account. Major exchanges not only send notifications for withdrawals but also for deposits. This helps the customer become aware of any inappropriate activity in their account. Some exchanges even give you the ability to block withdrawal requests if the requests didn’t come from you.
Withdrawals Restricted After Account Settings Change
A hacker will typically change account data such as the linked email address or phone number of an account. This is so that the hacker can approve potential withdrawal requests that are sent to the email address or phone number linked to the account. Cryptocurrency exchanges avoid the catastrophe that can be caused by this hacker activity by restricting withdrawals from the potentially compromised account for a day, several days, or in some cases; a week.
Insurance For Your Funds
If your funds are stored on an exchange, they may be eligible for insurance. Funds stored on an exchange can be insured in two ways. The first way is by an external insurance company, and the second is to have them backed by some internal policy or regulation. A good exchange will cover their customers’ losses in the case of the platform being hacked to make the platform more attractive to new customers.
Now that we have taken a look at some of the features that exchanges need to have, as well as some precautions you can take, to ensure the security of your funds on an exchange platform, let’s take a look at KuCoin and what security features the KuCoin platform offers its clients.
An Introduction To KuCoin
KuCoin is an exchange platform launched in 2017 and offers a wide variety of cryptocurrency trading pairs for its clients. Since its launch, KuCoin has become a popular exchange platform for members of the cryptocurrency industry and is now in the top 10 list of largest cryptocurrency exchanges in the world with regards to its daily trading volume. Over the years, KuCoin has transitioned from being just a cryptocurrency exchange platform to now being a platform that offers its users access to several DeFi protocols and services.
KuCoin Safety And Security
A cryptocurrency exchange as big as KuCoin, with all of the funds stored in the platform, needs strong security to fend off cybercriminals. Let’s take a look at some of the security features that KuCoin has in place.
A client has many security features at their disposal when using the KuCoin platform. Some of the main security features that can be enabled in a client’s account include 2-factor authentication, phone verification, email notifications, and IP restrictions for login. As you may recall, these security features alone offer more than adequate protection of your funds on any exchange platform. However, KuCoin goes the extra mile and also includes features such as a trading password, security questions, and an anti-phishing safety phrase. So, not only do you have the core security features that make up a secure exchange, but you also have protection from phishing and a hacker can’t trade your funds unless they know the trading password that you have set up.
Besides security features, KuCoin is a popular cryptocurrency exchange because of its strategic cooperation with Onchain Custodian. They are a Singapore-based cryptocurrency custody service provider which takes care of KuCoin’s cryptocurrency assets. Furthermore, the funds in custody are also backed by Lockton which is one of the largest private insurance brokers.
KuCoin Safety And Security: Conclusion
Cryptocurrency and blockchain technology has enabled anyone from all over the world to become their own bank and not rely on a 3rd party institution like a bank to facilitate their financial transactions. Members of the cryptocurrency space make use of exchange platforms almost on a daily basis. For this reason, there is a lot of cryptocurrencies that make its way through an exchange platform. This makes exchange platforms a popular target for criminals. Therefore, members of the cryptocurrency space need to find an exchange platform with top-shelf security features. One such exchange is KuCoin. KuCoin goes the extra mile for its clients to ensure the security of their funds by forming strategic partnerships with some of the world’s largest service providers. These partnerships cover clients and their funds against the threat of cybercriminals in the cryptocurrency space.
