The cryptocurrency exchange is the foremost popular platform for trading currencies as well as various virtual products. Cryptocurrency exchanges are independently run websites that allow users to trade one currency for another, as well as for virtual, fiat, and NFT currencies.
Consider the intended use before choosing the best crypto exchange Australia platform for the requirements. It’s extremely typical to utilize various exchanges in order to take advantage of each one’s unique field of expertise, such as employing one for accessibility to cryptocurrencies plus a second for NFTs or a crypto saving account.
A range of elements, including licensing, property storage, and insurance, including account security, contribute to the safety of an exchange. The most crucial factors to consider while examining an Australian exchange’s security and what it contains are listed below.
Regulatory Compliance
There’s an increasing demand for more focused regulation in the current cryptocurrency environment in Australia, where digital assets need to neatly fit inside present banking services legislation. The Australian government has stated that it plans to draft legislation to strengthen bitcoin legal frameworks in 2023.
According to existing legislation, cryptocurrency holdings that are or are a component of investment products or exchange-traded products need an Australian financial services license (AFSL) or an exemption (see the Australian Securities and Investments Commission (ASIC) Information Sheet 225).
The best cryptocurrency exchange Australia is licensed with AUSTRAC, abides by local anti-money laundering (AML), including counter-terrorist financing (CFT) laws, and is compliant with these laws. The National Credit Consumer Protection Act of 2009 (Cth) governs financial operations, including services, which might necessitate a license for cryptocurrency lending activities (NCCPA).
This makes it easier to verify that the trade is working legally and not engaging in unlawful activity. Although if firms had never experienced a breach, every Australian cryptocurrency exchange we utilize must have any sort of security in the case of one. This guarantees that customers will be protected if their security system malfunctions.
Security Measures
Strong security mechanisms, like multi-factor authentication, cold storage, and recurring security assessments, should exist at a secure cryptocurrency exchange to safeguard the assets of its users. In order to ensure that solely the customer whose account it is can complete transactions, security techniques like IP tracking and whitelisting and two-factor authentication (2FA) are used.
Since the crypto exchange wants consumers to be involved in their own account security, forcing 2FA is better for security. An Australian crypto exchange should have conveniently reachable customer assistance if customers encounter a problem.
Any trade with subpar or no customer service should be avoided. The majority of customer resources should be kept in cold storage by the cryptocurrency exchange so that they cannot be accessed in the event of a breach. Verify that the exchange we utilize maintains at least 90% of its cash in cold storage, ideally air-gapped.
For further confidence, one can also search for cryptocurrency exchanges with extra security-related credentials like ISO27001. These Australian cryptocurrency exchanges have successfully cleared an audit for data security management. This accreditation shows that exchanges have gained professional endorsement and are actively working to increase their security.
Track Record
Transparency is among the fundamental principles of best crypto exchange Australia, and the public digital ledger upholds this principle. Additionally, every transaction is recorded in the ledger permanently.
Generally speaking, cryptocurrency exchanges that deal with fiat (such as AUD, USD, etc.) to crypto exchanges are mandated to verify the identification of their buyers. Although some people prefer anonymity, which offers some protection, you should exercise caution while interacting with no-ID exchanges, especially if you plan to modify the 2FA or retrieve stolen passwords. All significant Australian crypto exchanges demand user identity.
Selecting the best cryptocurrency exchange in Australia is crucial, but it becomes even more crucial if you intend to leave money on the exchange at any time. In principle, it is thought to be better to use a crypto exchange with a lengthy history of reliable functioning plus few data breaches rather than a more recent exchange with scant or no track record.
Custodial & Non-Custodial
A third entity keeps a wallet wherein the secret keys are known as a “custodial wallet.” In other words, the third party has complete authority over your money, and all you need to do is express your consent to make or receive payments.
Cryptocurrency wallets that allow you to act as your own bank include non-custodial crypto wallets. It follows that users have complete control over their money and the corresponding private key. When comparing non-custodial cryptocurrency wallets, users retain full control over the data. As long as the user doesn’t disclose the information to anyone or the device doesn’t get hijacked, the threat of security breaches is reduced.
The most secure Australian cryptocurrency exchanges are typically non-custodial, meaning customers keep their assets directly. This provides you complete authority over your holdings and makes it more difficult for thieves to steal them.
