Binance is a crypto exchange offering low fees and advanced trading tools. In this guide, we’ll explore Binance’s security practices and consider whether it is a safe and secure exchange.
Overview of Binance and some guidance on crypto trading for beginners. Please note that cryptocurrency trading involves risks, and it’s essential to do thorough research and understand the market before investing your money.
What is Binance?
Binance is one of the world’s largest cryptocurrency exchanges, offering a platform for users to buy, sell, and trade a wide variety of digital currencies. It provides a user-friendly interface and offers advanced trading features for experienced traders.
Basic Trading Concepts:
- Cryptocurrency pairs:
Trading on Binance involves trading one cryptocurrency for another. These pairs are denoted as BTC/ETH, BTC/USDT, etc., indicating your buying and selling currency.
- Market orders:
A market order allows you to buy or sell a cryptocurrency at the current market price.
- Limit orders:
A limit order allows you to set a specific price at which you want to buy or sell a cryptocurrency. The order will be executed if the market reaches your desired price.
- Stop-limit orders:
Stop-limit orders are used to limit losses or protect profits. You set a stop price and a limit price, and when the stop price is reached, a limit order is placed.
- Candlestick charts:
Binance provides candlestick charts to visualize price movements. Learning to read these charts can help you make informed trading decisions.
Tips for Beginners:
Educate yourself:
Learn about blockchain technology, cryptocurrencies, and how the market works. Understand the fundamentals and do your research before investing.
Start with small investments:
Begin with a small amount of money you’re comfortable risking. Cryptocurrency markets can be volatile, so starting with an amount you can afford to lose is crucial.
Set and stick to a budget:
Define a budget for your trading activities and avoid exceeding it. Emotions can affect decision-making, so having a predefined plan can help prevent impulsive trades.
Use dollar-cost averaging:
Instead of investing a lump sum, use a dollar-cost averaging strategy to spread your investments over time. This approach can mitigate the impact of short-term market fluctuations.
Stay updated:
Keep up with news and developments in the cryptocurrency industry. Follow reputable sources to stay informed about market trends, regulatory changes, and security measures.
Remember, this is just a basic overview; there’s much more to learn about crypto trading. Taking your time, starting small, and gaining experience gradually is essential.
Is Binance Safe?
The bottom line is that Binance is a very safe crypto exchange (with some caveats). It keeps most of its crypto in “cold wallets” not connected to the internet. It limits losses in case of a hack and makes it unlikely that an attack will cause Binance to become insolvent. This means that if the exchange suffers a significant attack, users are likely to be reimbursed by the company.
Binance also offers hardware 2FA, a real-time monitoring system to detect suspicious activity, security notifications through email, and many other advanced security features.
Binance’s Basic Interface
Overall, Binance is a highly secure exchange.
On the other hand, no crypto exchange is 100 percent secure, including Binance. In the following few sections, we’ll go over its security practices in detail, and we’ll consider some ways that these practices can be circumvented by attackers who wish to steal your crypto. We’ll also discuss ways that you can help to prevent these attacks.
First, let’s go over the primary security practices of Binance.
Binance.US Security Practices
Here are a few of Binance’s security measures that help to prevent cyberattacks:
Cold wallets.
Ever since the notorious Mt. Gox hack, security experts have warned exchanges to keep the vast majority of their crypto on devices not connected to the internet. Binance doesn’t disappoint here, as it states that the “vast majority” of its crypto is stored in cold wallets outside cyber attackers’ grasp.
Two-factor authentication (2FA).
Like most crypto exchanges, Binance allows you to implement 2FA on your account. If you turn this feature on, you must enter a code from your phone every time you log in or withdraw. You can use text messaging or an authenticator app to receive the code. Unlike most exchanges, though, Binance also allows you to use a hardware device such as Yubikey to receive the code, which is an even more potent method than a mobile app.
Real-time monitoring.
Binance tracks every action done on the exchange, and it has an algorithm that analyzes activity to see if it is unusual—any action identified as suspicious results in a 24-to-48-hour freeze on withdrawals from your account.
If you authorized the action, you can contact customer service to remove the freeze or wait for the period to pass. But if your account was hacked, the 24-to-48-hour freeze should give you enough time to alert the staff that your account has been compromised.
Access control.
If you want further protection, you can set up “access control” mechanisms on Binance that limit withdrawals to only specific IP addresses or wallet addresses.
Organizational Security.
Binance uses advanced administrative security systems to help keep its crypto secure, including threshold signature schemes (TSS)2 that require multiple parties to authorize a transfer from one wallet to another.
Security notifications.
If Binance’s system detects suspicious activity on your account, it immediately notifies you through email.
Data encryption.
Social Security numbers, addresses, and other personal data are encrypted, making it difficult for hackers to get this information.
Secure Asset Fund for Users (SAFU).
Binance keeps a $1 billion fund available to reimburse users in case of a significant breach of Binance’s platform. It should help ensure that the company does not go bankrupt and fail to pay its obligations to users.
Binance has some of the most advanced security systems of any crypto exchange. But it is only partially secure. In the next section, we’ll review some risks of using Binance.
Risks of Using Binance.US
No matter how secure Binance is, it is still an old-school Web 2.0 app. In other words, it requires a username and password instead of a cryptocurrency wallet for logins. It means that when you first set up an account with Binance, you must think up a password to log in.
FYI:
The current Web 2.0 system is gradually being replaced by “Web 3.0,” which uses crypto wallets instead of passwords for logins.
There are lots of security problems with this type of login system. For one, you can use the same password for Binance for other websites to remember your password. But this means that if an attacker breaches the security of another website you use, he will have a hash of your Binance password.
Binance’s mobile app on an iPhone
And once he has your Binance password hash, he might be able to crack it using Hashcat or some other cracking software, thus revealing to him your actual password.
Another problem is that Binance allows you to reset your password using your email. So if an attacker gets access to your email account, this hacker can change your Binance password and lock you out of your account.
Enabling 2FA can help to prevent these types of attacks. But many people receive their 2FA codes from text messages. These messages can be intercepted if the attacker calls up your phone company and pretends to be you, telling your phone company that you want to transfer your phone service to your “new phone” (the attacker’s phone).
Finally, there is always the risk that the Binance platform itself could be breached. It is precisely what happened in the infamous Binance.com hack of 2019.
Binance Hack
In May 2019, Binance.com announced that a group of hackers had managed to steal “a large number of API keys, 2FA codes, and potentially other info.” 3 The hackers used multiple methods to steal this data, including viruses, phishing, and other methods. Using this data, they were able to make a withdrawal of about $40 million worth of Bitcoin.
However, Binance admitted that this hack was not the fault of users, and it immediately reimbursed all of its customers’ accounts from the SAFU.
None of Binance’s users lost any crypto or cash from the hack.
This hack only affected the international version of Binance. The U.S. branch has never been hacked. But because Binance.US and Binance.com use similar security systems, we wanted to inform you of this issue.
Overall, Binance acted appropriately in response to the hack. It recognized that the hack was caused by faulty platform security, not by anything users could control. So it reimbursed users’ accounts, and only Binance itself lost money.
How to Stay Safe While Using Binance
Here are a few steps to help protect the crypto you buy through Binance.
Enable two-factor authentication (2FA).
If you enable 2FA, you’ll be required to enter a code from your phone every time you log in or withdraw. It will help to prevent your account from being accessed in case your password is exposed or your email account is compromised.
For even better security, consider using an authenticator app (instead of text messaging) to receive the code. Or, if you can afford it, purchase a Yubikey or other hardware solution to obtain your 2FA code.
Use a strong password.
Ideally, the password you use for Binance should differ from those you use on other sites. That way, if another site you use gets hacked, your Binance password won’t be exposed. In addition, you can make the password hash harder to crack by combining capital and lowercase letters, numbers, and special characters and by making the password as long as possible.
Watch out for malware.
One of the easiest ways for a hacker to get your login info is to infect your PC with malware. The attacker sends you an email that looks like it’s from someone you know, and it contains a file attachment that appears to be a .pdf or some other legitimate file you want.
When you open the file, it infects your computer with software that searches through your computer, looking for sensitive data. At this point, it can steal your Binance password from within your browser (assuming you’ve saved it there for convenience) or even record your keystrokes the next time you log in.
Avoid getting phished.
Another vector of attack is for the thief to set up a fake Binance site. He then sends you an email claiming to be Binance and telling you that you must log in urgently. When you click the link in the email, it sends you to the fake site, and when you try to log in, the attacker accesses your username and password.
To help prevent this, check the sending address on every email that alleges to come from Binance, especially if it encourages you to click a link. An authentic email will come from the domain @binance.us or @binance.com, but a fake one may come from @ww-binance.com or some other misspelling.
More importantly, check the URL of the website the link leads to. You may notice that the domain there is not binance.us. You can set up an anti-phishing code through the Binance app interface to be even more secure. Once you do this, the code will be included in any email from Binance, making it easier to spot fakes.
Binance’s Advanced Interface
Consider withdrawing your crypto.
The most effective way to protect your crypto is to remove it from the Binance exchange. Withdraw it into your private wallet, and store the seed words securely within your house. It does away with usernames and passwords, making it much more difficult for an attacker to get your crypto.
No crypto exchange is perfectly safe. But following these tips should dramatically increase your chances of protecting your crypto.
Now here are some final thoughts on Binance safety.
Conclusion
Binance Safety
Binance is an excellent crypto exchange for serious traders. It offers meager commissions, many coins, and advanced trading tools. Most importantly, Binance is a reasonably safe crypto exchange with many advanced security features.
Source https://www.security.org/digital-safety/is-binance-safe
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