How secure is Binance? Binance is a secure place for cryptocurrency traders and users and is probably one of the safest bets out there.
Is Binance Safe?
Binance is a great platform to use for trading cryptocurrencies. With that said, no matter how secure exchange is, they’re always a hot target for hackers.
You probably remember those rumors about Binance being hacked in March 2018. However, they actually were not hacked.
What happened was a 3rd party app was requesting API keys from users to make trades for the users. The 3rd party app then abused this privilege by market buying a Viacoin and pumping the price.
Binance ended up reversing all the trades and paying its users back, so not a single user lost any money in this incident.
Personally I think it was the right solution from Binance.
Let’s check what else the platform does to ensure your personal information and funds are secure.
Two-Factor Authentication
What is 2FA?
2FA or two-factor authentication is when you protect your account with two factors or locks, creating an additional layer of security.
In this context, a factor is split into three different categories:
- Users knowledge (Password)
- Something the user owns (Phone)
- Biometric traits (Fingerprint)
To be properly protected by 2FA your account must require 2 locks before granting access.
Activating 2FA on your Binance account is a crucial first step toward securing your funds on Binance. There are two options for 2FA:
- SMS
- Google Authenticator
It is recommended to use Google Authenticator. While SMS 2FA may be more convenient, this increases the attack vectors that may be used to target your account (e.g. SIM swapping).
Universal 2nd Factor (U2F) authentication
U2F is basically two-factor authentication (2FA) through hardware security keys instead of the Google Authenticator and SMS.
The Binance website, both on desktop/laptop and mobile, now supports the FIDO2 open authentication standard. This means that 2FA devices that support this standard, like YubiKey, Trezor, and others, can be used as security keys for your Binance accounts. This means that for as long as you have security keys that you can use on your device, you can take advantage of this feature.
What Are the Benefits of Using Hardware Security Keys?
Hardware keys offer stronger security than the software methods of 2FA. With hardware keys, you get the following benefits:
- Better security
Enabling 2FA via security keys is more secure and tangible than 2FA options associated with a phone number or an app-generated code, which can be susceptible to attacks. Through security key 2FA, users are required to plug in their keys physically into USB or Type-C ports. A user then touches or clicks the button on the security key to generate a random security code, thus substantially enhancing security.
- Anti-phishing
By default, the security key is bound with the real Binance.com when the user registers it with the Binance account. With security key 2FA, the security key will verify the website address as well. Thus, phishing attacks will be mitigated.
- Exclusivity
An account can only be registered with one security key. It means it will only authenticate the registered device. Plus, the security key will generate a unique security key for each verification, bringing an extra level of security to your account and digital assets.
List of Authorized Devices
This is another security measure introduced by the platform.
You can create a list of devices that have been authorized to access your Binance account. If you see any devices that you don’t recognize or no longer use, simply remove them.
How to remove devices from your trusted list?
- Log in to your Binance account and navigate to “My Account” on your browser or app.
- Review “Device Management” at the bottom of the My Account page on your browser or under the “Security” menu on the app.
- Remove any unrecognized or unused devices. Once a device is deleted, it will no longer be able to access your account unless you re-confirmed via email.
Withdrawal Address Management
Allow withdrawals only to addresses you trust and check the whitelist regularly. Binance has a feature, “Withdrawal Address Management”, which allows you to limit the wallet addresses to which you can withdraw your funds. As each addition requires e-mail confirmation, this feature can protect you in special cases of unauthorized access.
Level 2 Account Verification
When you create your new Binance account, it is recommended to complete the Level 2 Verification. This is an Identity Verification process that requires you to upload a piece of your government-issued ID with a photo like your driver’s license.
By the way, if you want to save some money on your trading fee – and I am talking about 20% off from every trading transaction, then I’d recommend registering a new account using our referral link. Don’t miss this great opportunity!
Completing Level 2 Verification doesn’t only grant you a higher withdrawal limit, but also helps protect you from an attacker claiming ownership of your account. In situations where you have made a mistake, it also allows our customer support team to resolve your issue in a more convenient way.
You can also do it at any time, not necessarily during the registration.
Trust Wallet
No matter how secure exchange may be, it is often argued that your funds are most secure in your own possession. Trust Wallet, the official crypto wallet app of Binance, kinda Binance wallet, provides you with a convenient way to securely store your funds away from third-parties, with support for most major cryptocurrencies and all ERC20 tokens. You may download the Trust Wallet app for Android or iOS. And as a bonus, you can also easily integrate your Trust Wallet with Binance DEX and trade on the decentralized exchange.
Cold Storage
Another confirmation of the Binance trustworthy is their cold storage.
The exchange holds the majority of their funds on their cold storage, hence they are significantly harder to steal compared to the minority of their funds stored on their hot wallet.
What does it mean?
Binance only holds a small percentage of coins in its hot wallets. The remaining is kept in cold storage, disconnected from the Internet.
“SAFU” Fund
What is SAFU?
SAFU, the Secure Asset Fund for Users is an emergency insurance fund. Binance stores 10% of the trading fees they received on their emergency insurance fund, supposedly for them to hopefully be able to compensate their users if ever funds get stolen.
As of today, the fund is estimated to be several times bigger than John’s BTC stash, all stored in secure hard wallets to be accessed only in cases of extreme emergency.
State-of-the-Art Risk Control System Constantly Thwarts Unusual Activity
Technology and personnel combine to form a proprietary risk management and control system that analyzes every movement that takes place on Binance. With an almost 20-month history of transactions involving trillions of dollars in trades, the platform system is constantly on the lookout for irregular trades and any suspicious activity.
What can I do to keep my funds and Binance safety?
As you can see, the famous exchange does a lot to keep it as a secure place for its users and their funds. But you should have your input as well:
- Use a strong password for your Binance account and change it regularly.
- Don’t share your password with anyone and don’t write it down on a note sticker to put on your PC.
- Enable the “Whitelist” option in the Withdrawal Address Management section for allowed addresses.
- Complete Level 2 Verification for your Binance account.
- Make sure that you secure your account when using API.
- Secure Internet connection. Avoid connecting to public Wi-Fi networks and other shared connections, as these expose a risk for attackers that may want to intercept the data that you transmit.
- Install antivirus software and trust only secure apps/programs.
- Lock your phone and PC.
- Use unique emails for each of your accounts, including your Binance account.
Summary
Is Binance exchange safe? I’d say yes. It is as safe as it can be. The platform team does all the necessary steps and introduces multiple security layers to keep everyone protected. However, there is never 100%.