Centralized Exchanges: The Myth of a 'Clean Record'

The recent hacks of Bybit and Bitget, resulting in losses totaling $1.9 billion, have left many cryptocurrency users scrambling to find a secure exchange.

While searching for an exchange with a 'clean record' might seem like a good idea, it's actually the wrong question to ask, according to security expert Nick Percoco of Kraken. He points out that no centralized exchange has ever been completely free from hacks or breaches.

Kraken and Gemini are two exchanges that have managed to keep user losses at zero despite incidents occurring on their platforms. However, these incidents did not result in customer funds being lost due to robust security measures in place.

In the case of Kraken, its chief security officer revealed that a bug was exploited in 2024, resulting in nearly $3 million being withdrawn from the exchange's treasuries, but not client assets. Gemini has also faced vendor-related incidents, but these did not affect customer funds or accounts.