red 
A secure cryptocurrency exchange should have several key factors in place to ensure the safety and security of your assets. Regardless of the platform, security protocols and protection measures are essential to the success of a cryptocurrency exchange.
Binance, one of the world’s leading cryptocurrency exchanges, is no stranger to hacking attempts on its network. In 2022, it suffered a major breach that resulted in the theft of over $570 million in crypto assets. Since then, the exchange has been doing its best to tighten security measures and recover the stolen assets. In 2024, Binance managed to recover around $73 million in stolen funds and made improvements to its security architecture.
Since no online exchange can guarantee 100% security and protection, we will review Binance updates and help answer your “Is Binance safe?“
Table of Contents
Binance Security Features
Two-factor authentication (2FA): 2FA is an essential security feature to protect user accounts on the Binance platform. This means that you must provide two forms of identification to access your account, such as a password coupled with a verification code. This feature is not mandatory but its use is highly recommended as it helps reduce the risk of accounts being hacked.
Cold wallet storage: Binance supports a number of cold wallets to reduce the exposure of your cryptocurrencies online. Compared to hot wallets, which store all your private keys and information online, cold wallets are completely separate and therefore the safest place to store cryptocurrencies.
Binance SAFU Fund: The Secure Asset Fund for Users (SAFU) is an emergency fund created by Binance in 2018. The fund works by the exchange allocating 10% of all trading fees to the fund, which is then used to compensate users if a hack or breach results in the loss of assets. It acts as an insurance policy to help return your funds if the network is compromised.
Encryption and security layers: Binance uses advanced encryption protocols to protect your sensitive information such as login details, financial transactions, and personal data. This makes it difficult for your information to be leaked in the event of a breach.
There are additional measures such as: Firewalls, Threshold signature plans (TSS), and Whitelists To provide more security.
Binance in 2024
Since the beginning of 2024, Binance has faced several security concerns. The most alarming was when Binance’s real-time monitoring system identified over $2.4 billion in potential user losses. Fortunately, this prevented over 1.2 million global users from falling victim to phishing scams and fake withdrawals.
However, Binance is still in an ongoing security battle with external hacks.
In July 2024, Binance was able to recover around $73 million of stolen funds but still prompts users to ask “How secure is Binance?” – Sure, the exchange helps with recovery, but what allows hackers and scammers to access the exchange in the first place?
Regulatory issues
In 2024, Binance continued to face scrutiny from global jurisdictions. Countries like the US, UK, and European member states implemented stricter crypto regulations and put Binance under fire for allegedly operating without proper licenses in certain regions.
The fact that Binance does not claim a clear headquarters – the Malta Financial Services Authority (MFSA) has clearly stated that Binance cannot operate in Malta – has led many regulatory institutions to question the company’s legal structure.
Additionally, Binance CEO Changpeng Zhao has resigned. He has led Binance since the company’s inception. His resignation comes at a time when regulatory pressure and allegations of non-compliance in several countries are under scrutiny.
Security on Binance compared to other cryptocurrency exchanges
Binance is one of the many big names in the cryptocurrency exchange space. There are many other names that are preferred by global users. Here are some popular options and how they compare to Binance:
Binance vs Coinbase
These exchanges are widely known but differ significantly, especially in their security features. While both exchanges are compatible with cold wallets, Binance uses a multi-level security system, such as 2FA and SAFU, and Coinabse offers regulatory compliance. Coinbase’s level of transparency, especially within the US, has led to it having insurance policies to protect user funds.
Binance vs Kraken
Both exchanges implement two-factor authentication, but Kraken has the added strength of physical security keys. The master key prevents password resets without request, even if your email account is hacked. In terms of compliance, especially in the US, it follows strict rules such as anti-money laundering policies and requires proof of its reserves for US audits. Binance, on the other hand, has faced more challenges with regulatory rules.
Why You Should Use a Cold Wallet to Store Your Cryptocurrencies
Using a cold wallet is one of the most secure ways to store cryptocurrency. Unlike online hot wallets, which are connected to the internet, cold wallets are offline and inaccessible to hackers. This makes them ideal for storing large amounts of cryptocurrency that you don’t plan to trade frequently.
Leaving large amounts of cryptocurrency on an exchange carries a lot of risks, no matter how many security features and protocols are in place. For example, while exchanges like Binance and Coinbase offer security protection, there have been several hacks that resulted in significant losses.
To fully protect your assets, moving them to a cold wallet is your best option.
The Material Bitcoin wallet is an excellent cold wallet solution. It is designed to give you maximum protection while maintaining ease of use. It is easy to use and is the best way to protect your cryptocurrencies offline.
Is Binance a safe option for you?
When deciding which exchange to use, there are a few factors to consider:
1️⃣What type of cryptocurrency user are you?
Are you looking to trade your cryptocurrencies frequently or are you buying and holding Bitcoin as a long-term investment? Professional traders may benefit most from using Binance as it provides access to over 350 cryptocurrencies and facilitates quick trading. While those looking to hold cryptocurrencies would be better off securing their assets in a cold wallet.
2️⃣What is your risk level?
It is important to understand your risk tolerance and feel comfortable leaving your cryptocurrency on an exchange. Since regulations can change quickly, so can what that means for your funds on an exchange.
Final conclusion
Whether you are a beginner or an advanced trader, it is important to assess your risk tolerance, consider practical security steps such as using a cold wallet, and stay up to date with platform developments.
Binance can be a great option if your priority is trading, but keep in mind that anything online, no matter how strong its security features, will always be an easy target for crypto hackers.
Frequently Asked Questions
What happens if Binance gets hacked?
- If Binance is hacked, it uses the SAFU fund, a $1 billion reserve, to compensate users for any losses caused by the hack. Compensating victims can take time, and it doesn’t protect against other information leaks.
How does Binance handle security breaches?
- Binance monitors threats in real-time using AI and manual reviews. In the event of a breach, it freezes accounts or transactions until the issue is resolved.
Is Binance safe for beginners and experienced traders?
- Binance is suitable for both, although beginners may find it complex.
Can I get my funds back if my Binance account is hacked?
- Binance has recovery protocols and a SAFU fund for security breaches.
Is Binance compliant with global regulations?
- Binance has faced scrutiny in regions like the US and Europe. It is taking steps to cooperate more with regulators in 2024.
