Key Security Features Crypto Exchanges are Implementing

In February 2025, the 加密货币 world was shocked by the news of a hack that took $1.5 billion in crypto from the Bybit exchange and its cold wallets. It was the largest such breach in history, but it wasn’t nearly the only one.

In 2024, the funds stolen from crypto exchanges reached $2.2 billion. That was an increase of over 20 percent when compared to the year before. All of this is to say that security is one of the biggest issues crypto users are facing, even now when a lot of effort is put into preventing breaches.

Who’s doing the Hacking?

An interesting change has also come about in who’s doing the hacking. A few years ago, hackers were individuals, usually with expertise in tech, and they were often self-taught for personal gain. Lately, however, major hacks have mostly been covert government actions and mostly from so-called rogue governments.

For instance, the North Korean government has stolen about $1 billion in cryptos across 20 different hack attacks. There are also a few large attacks that are believed to be the works of DRPK, but there’s no official confirmation yet.

Implementing Security Features

Crypto exchanges are, therefore, putting in place increasingly complicated security measures to make the overall user experience safer. In this article, we’ll go over some of the measures that the best crypto Bitcoin exchanges at the moment, are using to prevent hacks.

Multi-Factor Authentication

Multi-factor authentication is a process that requires the crypto exchange users to authenticate their identity using two or more methods. That way, there’s no chance that the transfers were made by mistake or as a result of fraudulent actions.

The most common second method is to send the user a code via SMS that they need to enter in order to confirm the transfers, but many exchanges also use authenticator apps and biometrics, such as fingerprints or face scans.

Cold Wallet Storage

Cold wallet storage refers to a security measure requiring the exchanges to keep a portion or all of their funds in an offline wallet. This prevents hacking altogether but requires a system through which the exchanges will still be able to provide funds when their users need them quickly.

There’s also a policy issue of how much of the funds should be available at all times and how much should be held in cold storage. The most reputable exchanges are the ones that hold as much as 90 percent of the funds in cold storage.

Know Your Customer Efforts

‘Know your customer’ is a policy that refers to the fact that the crypto exchange needs to know the real identity of its users and customers. The policy originates from anti-money-laundering efforts used on fiat money. This means that crypto platforms, or at least some of them, can no longer be used anonymously.

For many crypto users, one of the main points was that central banks don’t issue cryptos and that transfers can be made without providing personal information. However, that’s one benefit that got lost now, when cryptos are widely accepted.

Monitoring Transactions in Real Time

Crypto exchanges monitor all the transactions made on them as an additional security measure. That way, the exchange can be aware of whether transactions seem suspicious or indicate fraud. For instance, if a user makes a lot of small transactions in a short period of time or if they make one unusually large one.

Once the exchange is aware of these transactions, they can stop them and notify the user so that they can clear them up.

Ethical Hacking Efforts

Ethical hacking refers to the process in which exchanges hire hackers to go through their security defenses. That way, the exchanges can be aware of the problems they are actually facing and how a hacker would try to circumvent their security measures.

交换s can, therefore, implement changes based on the results of those ethical hacks. It goes to show that an exchange is trying to set up its security measures from the point of view of those who may try to threaten it.

 User Education

In the end, many crypto exchanges are making an effort to educate their users about the potential security threats and behaviors that put their assets at risk. This may be the most difficult part of securing an exchange since the users are often the weak point.

This needs to be a joint effort, and users need to be aware of its importance as much as the exchanges themselves.

To Sum Up

Crypto exchanges have been hacked recently, and losses amount to millions of dollars in crypto equivalents. Foreign governments have done some of the hacks, and the efforts put into them are substantial.

Therefore, crypto exchanges are making a complex effort to make their users more secure when trading crypto. These include education, security measures similar to those used for fiat money, and IT checks that prevent fraud.

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