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Is KuCoin Safe?
Security is one of the primary concerns in the cryptocurrency game. After all, your crypto coins are precious assets, and the crypto world is particularly vulnerable to malicious delinquents from the depths of the internet.
So, if you want to start trading and earning money on a cryptocurrency exchange like KuCoin, it would be wise to know first whether it’s trustworthy or not. In this article, we’re going to ask the question, is Kucoin safe?
What is KuCoin?
KuCoin is a cryptocurrency exchange established in 2017 by Michael Gan and Eric Don. Designed to be easily accessible to beginner traders, it features a sleek and easily-accessible UI. It also offers some of the cheapest rates compared to other crypto exchanges.
Although it’s still currently unregulated in many countries, KuCoin cares a lot about the quality of its service and the protection of its users. It implements security features like KYC (Know Your Customer) and 2FA, which are standard protocols in the industry.
More than that, KuCoin also goes above and beyond to stay safe and secure. It’s part of a digital security-focused alliance that partners with other services and accredited individuals to fund projects that enhance security in cyberspace.
Aside from its robust security measurements, this exchange also boasts other great features.
For one, it has some of the lowest transaction fees among the most popular exchanges. It also hosts an extensive list of crypto coins, including the small, lesser-known ones. If you’re interested in investing in something that has the potential to become big, the KuCoin platform is a great choice.
Is KuCoin Trustworthy?
KuCoin might have excellent features and low fees, but is the platform trustworthy? The answer isn’t as straightforward as we would have liked.
One reason for this is that KuCoin is not yet licensed for use in the United States, which means that no government body regulates its operations in the country. Should the unfortunate thing happen and the exchange is hacked, the US government can’t guarantee that you’ll get back your money.
That said, KuCoin does have an existing partnership with Onchain Custodian.
Onchain Custodian is a digital asset custody service from Singapore, which offers custody and insurance services for institutions and accredited investors. Instead of crypto exchanges storing their own cryptocurrency assets, most use an insured third-party option.
Companies like Onchain Custodian secure and insure the cryptocurrency assets that you have in your KuCoin account. In turn, OnChain Custodian is backed by Lockton, the world’s largest private insurance company.
From this, you at least have some level of protection from some of the most common threats in the cryptocurrency arena.
KuCoin might not be regulated, but it does its best to maintain the security of its userbase. In the past, the platform fell victim to one of the largest cyber attacks to date, which made the company upgrade its systems to level up security.
For the users, here are some of KuCoin’s security features.
It’s standard practice for cryptocurrency exchanges like KuCoin to require ID verification for their customers. Upon registration, users are asked to enter personal information proceed with the account creation. This is known as the KYC or “Know Your Customer” protocol.
This protocol is employed to prevent financial misconducts that stem from having a fraudulent identity, such as money laundering and fraud. It also helps to quickly recover accounts that a third party has illegally taken over.
To incentivize users to verify their accounts, KuCoin limits access to its features. The level of access will increase depending on the identity-verification status.
2-Factor Authentication, or 2FA, is another security procedure designed to protect users from hackers.
With 2FA, users who try to log in to the platform will have to confirm their identity through another means. Most of the time, this is done by linking a third-party app such as Google Authenticator to your account.
This way, even if an unauthorized third party gains control of your account credentials, they won’t be able to use your account without entering the code from your linked Google Authenticator.
On the KuCoin platform, users will see an option encouraging them to set up 2FA the first time the account is opened. KuCoin also warns users not to unlink their account to 2FA for their own safety.
KuCoin encrypts its clients’ data to provide a base layer of security from hackers and malicious entities. Built to exacting standards, KuCoin’s bank-level encryption and data security provide a safe transaction environment.
More than that, most of the crypto assets stored in KuCoin accounts are also stored in cold wallets. Cold wallets are independent cryptocurrency wallets that exist offline and don’t need to be connected to the internet.
However, a certain amount of assets are still stored in online wallets to ensure that clients have instant transactions when dealing with the platform.
Other Security Features
There are several more security features that KuCoin uses to secure its registered user base of more than 10 million people in 2021. These include:
- Unique trade passwords: Aside from their account passwords, users can also set up unique trade passwords that they can implement in every transaction in the platform, such as during trading, withdrawing money, building APIs, and other activities.
- Safeguard Program: The KuCoin Safeguard Program is an alliance between people and institutions that have experienced cyberattacks. This agreement encourages the growth of projects dedicated to cybersecurity. It also acts as a volunteer organization that provides varied forms of assistance should an attack ever occur to one of its partners.
- Customer support: KuCoin’s Customer Support service is another line of defense against cyberattacks and other harmful activities perpetrated against its users. KuCoin promises a swift response once you report that your account might be at risk. You can reach the customer service 24/7 via chat, ticket submission, or through the mobile app.
KuCoin Cyber Attack
These measures proved helpful in September of 2020 when KuCoin experienced the fourth most prominent cyber attack of all time that siphoned more than $280 million worth of digital assets.
To the company’s credit, KuCoin’s reaction was swift and competent, and it was able to recover most of the stolen assets.
KuCoin was able to use its partnership program to mount a thorough and dedicated recovery effort that ended in the retrieval of about 84% of the total losses.
Of the remaining amount, the platform’s insurance policy covered at least 16% ($44.55 million) of the damage, while law enforcement was able to recover 6% ($17.45 million).
After the attack, KuCoin implemented several high-level security updates that upgraded its security system, network security architecture, and security team.
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KuCoin Safety and Security: Final Thoughts
If you’re looking for a highly-regulated exchange like Coinbase, you won’t find that in KuCoin. This exchange platform is not licensed for operation in the United States, so it’s not backed and regulated by the government.
However, KuCoin cares a lot about its security. The company has taken steps to maximize the safety of its website and has partnered with distinguished custodian services to secure and ensure its assets against threats.
Although it suffered pretty severely from an attack, it bounced back quickly and recovered most of the stolen assets. It also thoroughly updated its systems to make sure it never happens again.
So, is KuCoin safe? All things considered, KuCoin is a safe platform for traders of all levels to invest in.