Binance is unquestionably one of the most popular and largest cryptocurrency platforms in the world. 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 does not necessarily mean being a safe cryptocurrency platform. So, is Binance safe? Can you trust the platform with your virtual assets? We’ll take a look.
How secure are cryptocurrency platforms?
Although the security strategies used by cryptocurrency platforms have evolved positively over the years, the crypto industry continues to face many 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 only for the platforms, but also for the end users.
Big or small, a crypto platform’s size or its security policies wouldn’t deter hackers from coming for it. In 2020, popular Seychelles-based crypto exchange KuCoin lost $281 million in a hack. Similarly, the lesser-known Poly Network suffered a $610 million breach in 2021. Recently, the Nomad Bridge also suffered security breaches that saw nearly $200 million stolen. All platforms, regardless of size, can be targeted.
For the Poly network breach, at least, the hackers later returned the stolen funds, but that’s not always the case. The possibility of losing your funds forever is very real. However, that doesn’t mean that crypto platforms aren’t secure – they try to be. Different crypto platforms use 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 is important to ask questions about the security of a crypto platform before launching.
Is Binance safe?
As recently as October 6, 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 later minimize the loss to less than $100 million. So if Binance also suffers hacks, can you trust Binance with your funds?
For starters, Binance user funds are safe, despite the latest hack. Besides the basic blockchain security strategies it uses, Binance has other ways to keep your money safe. One such means 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 compensate users in the event of financial loss.
So, if a hack were to occur and user funds were 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 is not 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 such as device restriction, address whitelisting, and two-factor authentication make it extremely difficult 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.
Additionally, any US dollars you have on Binance are insured by the US Federal Deposit Insurance Corporation (FDIC). So if something were to happen one way or another to those funds, the FDIC would cover them. Once US dollars are converted into cryptocurrency, Binance’s alternative collateral comes into play.
Is Binance US safe?
If you are a US citizen, you will likely be using the special US version of Binance. The United States has restricted Binance trading activities for US citizens. The company responded by partnering with a US company to launch Binance.us, a US variant of Binance registered and compliant with US laws.
Just like the global version of Binance, Binance US has several security features in place to protect its users’ funds. It is usually subject to numerous regulatory and security checks, perhaps more than the international version, ensuring that it remains compliant with US laws.
According to a report by Xiamen SlowMist Technology, a reputable security analysis firm, the entire Binance platform performs “excellent” in cybersecurity checks. Simply put, Binance’s security measures supersede most platforms in the cryptocurrency industry.
Binance isn’t perfect, but it’s reliable
Although Binance has experienced a few security vulnerabilities in the past, the company is generally transparent about its vulnerabilities and takes steps to fix security vulnerabilities.
So if you are new to crypto and wondering if Binance is safe, Binance is not perfect, but it is one of the safest cryptocurrency exchanges you can trust with your funds.
