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What Makes a Trustworthy Crypto Exchange

Author: Alan W. Date: 2023-02-09 03:12:23

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Trust is probably the most important element underpinning the world of finance. In crypto, it’s no different. Every cryptocurrency platform can claim to be the best, but the ones that stand out are those that genuinely attract the trust of its users and the broader community. Because crypto is less regulated than traditional finance, exchanges must go the extra mile to be considered reputable. To become a trustworthy crypto exchange, a platform must first prioritize the safeguarding of user assets, while also providing top-notch transparency, communication, and usability.

Reliable Asset Security and User Protection

For a custodial centralized exchange, security and protection is the name of the game. Malicious hacks leading to severe loss of funds have been endemic to the crypto exchange business since the beginning. Even big names within the industry like Binance and KuCoin are not immune, having lost hundreds of millions from their hot wallets in 2019 and 2020 respectively.

One crypto platform that’s never suffered a hack in its history is Phemex. We implement a reliable Hierarchical Deterministic Cold Wallet system to reduce asset exposure to connected networks. The majority of user funds are kept in cold storage and those that are in hot wallets undergo rigorous, manual risk controls before being moved. For greater trustworthiness, Phemex’s trading engines were built with priorities placed on high velocity and total availability so users don’t ever miss the chance to execute a trade due to system errors, or have to deal with annoying, abrupt wicks seen on less efficient platforms.

Cryptocurrency Platform Transparency and User-friendly Reputation 

Asset security is paramount for any trustworthy CEX, but after that the platform’s transparency must also be scrutinized. After all, FTX allegedly did not suffer any external hacks either until its utter unraveling due to fraud being committed behind the curtains. Proof-of-reserve has exploded in relevance amongst centralized exchanges in response, but for PoR to be truly legitimate nothing should be hidden from users. Phemex’s proof-of-reserve tool achieves full transparency because it doesn’t rely on a third-party auditor (single point of failure) and proof-of-solvency is published as well, thereby increasing the platforms’ overall trustworthiness.

In a similar vein to transparency, an exchange’s reputation can be greatly bolstered if it is user-friendly. That way, newcomers can quickly learn the ropes and be able to verify their account balances or try out new products with familiarity. That’s why Phemex offers a comprehensive Help Center and over 1000 educational articles across our Academy and Blogs, so anyone can find the information they need whether it’s about cryptocurrency or about platform functionality. Phemex communicates all significant exchange updates with haste, thereby strengthening its connection and trust with users.

Phemex as a Highly Trustworthy Crypto Platform for Bitcoin Trading

Through our multitude of safety mechanisms and industry-leading focus on transparency, Phemex is one of the most trustworthy crypto exchanges. All users can trade Bitcoin and over 300 other cryptocurrencies with peace of mind, knowing that their funds are backed by one of the few major exchanges to have never been hacked and to boast an innovative proof-of-reserve.


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