In 2020, FCoin, once a cryptocurrency exchange, announced that between 7,000 and 13,000 BTC cannot be recovered, leading to its decline; during the same year, KuCoin faced a security crisis: it suffered a major attack, resulting in a loss of approximately $275 million; In 2022, FTX, the second largest cryptocurrency trading platform in the world, fell apart in a few days.
The FTX crash hit the entire cryptocurrency industry hard. According to data from on-chain analysis agency CryptoQuant, within seven days after the FTX incident, cryptocurrency investors withdrew more than $8 billion in assets from CEXs. Both retail and institutional investors began to doubt CEXs and the entire industry, and many cryptocurrency users could not understand why FTX, which was booming, crashed overnight.
In recent years, hacking and misappropriation of funds have been the two main causes that led to the failure of well-known trading platforms. For example, FTX filed for bankruptcy in large part due to the embezzlement of its users’ assets. In essence, cryptocurrency trading platforms fail due to the lack of security of user assets. The FTX crash has compromised our confidence in CEXs. As DEX trading volume continues to grow, CEXs need to take action and provide a ray of hope to the crumbling cryptocurrency market.
Proof of reserves.
CoinEx launched the “Merkle Tree” audit method as its proof of reserves in December 2022, becoming one of the first cryptocurrency trading platforms to disclose its proof of reserves. This is a way of auditing assets and checking if a platform has enough assets on-chain to support the ledger assets of its users, and CoinEx employs the Merkle Tree to demonstrate its 100% reserve ratio.
Since its inception in 2017, CoinEx has lived up to its promise and maintained a 100% booking rate. On this secure and transparent platform, user assets are never misused for any reason and all withdrawal requests are processed in a timely manner. In addition, to protect users’ assets, CoinEx has adopted comprehensive measures, such as high-speed trade matching engine, abnormal IP address change monitoring, login reminder, real-time alert of changes asset management, multi-layered withdrawal verifications, API permissions, two-factor authentication (2FA), and real-name authentication.
CoinEx has maintained a record of zero accidents and has built an extremely stable system protected by comprehensive measures, keeping user assets safe and secure. Over the past five years, the platform has taken concrete steps to show that it is protecting user assets in all respects. At the same time, it has also been tested and challenged in a turbulent market.
In addition, to enhance its asset security and risk control capability, CoinEx launched the Security Threat Intelligence and Vulnerability Reward Program to encourage more users and security experts to identify and submit platform security vulnerabilities and help keep her safe. To be more specific, the program divides potential vulnerabilities into three tiers based on their threat, offering up to 10,000 USDT to participants.
LevelPrizesLevel 1200-1,000 USDTLevel 21,500-4,000 USDTLevel 35,000-10,000 USDT
In launching the Threat Intelligence and Vulnerability Bounty Program, CoinEx said it prioritizes the security of its products and businesses. The platform promised that CoinEx employees will track, analyze, and respond to all issues raised by participants. In addition, CoinEx also announced that it encourages the disclosure and responsible handling of vulnerabilities and appreciates every white hat hacker who protects the interests of users and helps CoinEx improve its security performance. The program shows that in addition to protecting user funds and enabling safe and comforting cryptocurrency trading, CoinEx also hopes to build a more secure platform together with users.
Last year, the cryptocurrency market was volatile and both capital and users continued to exit the world of cryptocurrencies. Despite that, while improving its products and services, CoinEx strove to protect users’ assets, enhance their trading experience, and restore trust in cryptocurrencies.
Although DEXs still couldn’t outperform CEXs, CoinEx is aware that building a more secure, reliable, and user-friendly trading environment is the only way to stay stable during market booms and busts. CoinEx’s efforts have provided a glimmer of hope by comforting cryptocurrency users who have experienced frequent fluctuations in the market. Meanwhile, CoinEx has continued to refine its products and services, system-level stability, and asset security to gain momentum and prepare for the next cryptocurrency bull market.
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