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):
Cybersecurity — Unsecure exchanges are more likely to get hacked
Regulatory Risk — Less compliant exchanges are more likely to get shut down
Track Record of Hacks — Previously hacked exchanges are more likely to get hacked again
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.
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.
The second most popular exchange by volume ranked outside of the top 20, thanks to a recent hack and weak security practices.