The history of cryptocurrencies started with innovation, passion, and determination. The launch of Bitcoin in 2009 marked a pivotal point for the world economy. However, this story also began with disappointment and one of the most important theft in its early tale.
In 2014, when Bitcoin had just surpassed the $1 price, a group of hackers stole over $400 million or 700,000 BTC from crypto exchange Mt. Goxx and caused the platform to file for bankruptcy. Users were the most affected, most still waiting to receive compensation from the failed platform.
The crypto industry has seen hundreds of hacks similar to Mt. Goxx, such as the Plus Token Scam which took millions in Bitcoin, Ethereum, and other tokens from their crypto wallets. Most recently, crypto exchange AscendEX, formerly known as BitMax, was hacked and lost over $70 million from its users.
Per the company’s report, bad actors transferred the funds from the exchange’s hot wallet which contained funds on Ethereum, Polygon, and Binance Smart Chain. The exchange has around one million clients, some of which are major institutions.
Thus, choosing a trustworthy exchange remains one of the most important points for crypto adopters. This metric has been on a constant rise and seems poised to only continue to increase.
Amongst crypto exchanges in the industry, Phemex has a leading spot due to its security mechanism. The platform has never been hacked and has been able to keep its users’ funds safe with an innovative security system.
Why Phemex Is Better Than The Competition
Phemex uses a Hierarchical Deterministic Cold Wallet System. This allows each user to have their own cold wallet deposit addresses separated from the rest of the people on the exchange. In addition, the platform collects all deposits recorded, and via offline signature, the funds are sent to a cold wallet protected with multi-signature.
The exchange was founded by a team with experience on Wall Street. Thus, they have set up a system that protects the users by scrutinizing and reviewing every transaction on the platform. Withdrawal requests are processed three times each day and both founders and operators must approve them, according to Phemex’s official website.
In that way, any malicious actor or threat is immediately neutralized. Even after a withdrawal request was approved, the funds will be sent via offline signature from the exchange’s cold wallet. Other exchanges could have a security system in place but lack Phemex’s guarantees and its team experience.
Hot wallets have been one of the most vulnerable single points of failure in a crypto exchange. Thus, Phemex has eliminated its use on the platform and claims all operations that take place within its system are conducted offline.
In combination with Phemex’s Trading Engine Safety, which protects users’ funds in any market condition, and the User Account Safety, which includes a two-factor authentication mechanism and a high-end bookkeeping system, this platform meets the crypto and could meet any industry’s standards in consumer protection and security.
Bitcoin alone could have over one billion users in the next five years, Ethereum many more due to the variety of use cases, and other blockchains similar or bigger numbers. Crypto and its underlying technology continue to gain relevance as potential tools to improve the current financial system or disrupt industries worth billions.
Therefore, crypto exchange platforms with high-security standards, such as Phemex, will only grow in relevance as more people jump into the crypto space. Phemex could have one of the most robust security systems in the crypto industry, one required to onboard the crypto users of today and tomorrow and protect them from all the bad actors looking to prey on any platform’s weakness.