In CryptoCompare’s July Exchange Benchmark report, which aims to provide greater insight on the level of risk of cryptocurrency exchanges existing in the market at present for analysis, Winklevoss-owned Gemini exchange was found to be the exchange with the lowest risk factor ranked in first place. Coinbase and Kraken follow closely behind in second and third place, while Binance is ranked in eighth place. Huobi Global, on the other hand, is ranked in 17th place.
CryptoCompare notes that the ranking is not an assessment of how good or bad an exchange is as their methodology is targeted specifically at identifying risk factors. Components considered in the ranking are legal and regulation, data provision, security, the team and exchange itself, market quality, KYC and transaction risks and lastly, asset quality and diversity. Based on the different weighting for each factor, exchanges are “graded” in each criteria and the exchange is given a rank based on the total number of points it has across.
The report also has separate ranking and assessment standards for decentralized exchanges (DEX), where the Binance DEX dominates the list.
“Our results show that in average terms, exchanges based in Luxembourg, Japan and the USA are among those boasting the lowest risk exchanges. Other high scoring countries include Australia and South Korea. Legal jurisdiction forms only a small component of our overall risk ranking. However, exchanges that reside in jurisdictions with higher quality regulatory frameworks tend to perform better across several risk metrics,” the report states.
According to the team’s findings, top-tier exchanges are gaining more market share from lower-tier exchanges in an ever-competitive market, which highlights the importance of security and trust in safeguarding both assets and also user privacy when they are conducting their activities on their preferred exchanges.
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