CDx Power Rankings — Crypto Exchange Risk (November, 2018)

Binance finishes outside the top 5, Bitfinex ranking surprises many, and Kucoin is deemed high risk.

Since 2011, cryptocurrency exchanges have lost $12.6 billion because of hacks, scams, and regulatory seizures. When this happens, exchange customers usually pay the price.

Yes, $12.6 billion.

At CDx, our mission is to make crypto safer for everyone. Understanding exchange credit risk is hard, so we built a predictive model that provides credit scores and rankings on each exchange’s risk of defaulting because of a hack, scam, etc.

Credit risk is the risk that an exchange is unable to give your money back.

Ranking are determined by four factors

The rankings are based on a combination of factors from four categories (the report and Andrew’s methodology article goes into more detail):

1. Cybersecurity — Unsecure exchanges are more likely to get hacked
2. Regulatory Risk — Less compliant exchanges are more likely to get shut down
3. Track Record of Hacks — Previously hacked exchanges are more likely to get hacked again
4. Exchange Volume — High volume exchanges are more likely to repay customers after a hack

Good News: Safe, regulated exchanges are available

Binance and Poloniex are both landed in the top 10, but out of 100 exchanges, only 3 managed to gain a rating of AA or higher.

CDx Report Preview — Top 100 Cryptocurrency Exchange Credit Rankings

Although regulated exchanges performed well, the riskiest exchange to store digital assets on was also regulated.

Bad News: Popular exchanges fail basic security practices

A number of popular altcoin exchanges rank in the bottom 25, including Liqui and Cryptopia.

CDx Report Preview — Top 100 Cryptocurrency Exchange Credit Rankings

The second most popular exchange by volume ranked outside of the top 20, thanks to a recent hack and weak security practices.