Which Exchanges Are SAFE & Which Are The NEXT FTX?!

Just how safe are some of the crypto Exchanges that so many of us rely on Could some be ticking time bombs waiting To go off and which are safe and sound Ever since the implosion of FTX these Questions have been on everyone's mind Throw in a seemingly NeverEnding stream Of online fud and it's no surprise that Many people in crypto have deep Misgivings about exchanges in general so In today's video we take a look at four Of the biggest and best known exchanges Out there and examine how safe they Really are this is a video you can't Afford to Miss before we dive into these exchanges It's important to state that no matter How secure you think an exchange is you Can never be 100% certain that your Funds are safe as long as you have to Rely on a third party to hold your Crypto there has to be a level of of Trust the only way that you can get that Certainty without relying on trust is Through self- custody now we've talked About this adium on the channel before And there are some videos in the Description that look at this issue in More detail so with that caveat out of The way let's first kick off with a Quick beginner's guide to one of the Most well-known ways for exchanges to Prove their solvency proof of reserves Or P now if you want to move on to the

Exchange analysis right away use those Timestamps Below so then what is proof of reserves Well it's a method of cryptographically Verifying that an exchange is actually Backing the coins or tokens that it Claims to hold on behalf of its users p Is a process whereby The Exchange is Able to in a trustless manner show that They are backing their liabilities Onetoone with user assets now this is Important because if an exchange does Not have all client funds backed with Assets then it's running on fractional Reserves that's what happened with FTX Quadriga and mount goau quite simply had Those exchanges done regular proof of Reserve audits it would have been very Difficult for them to hide their losses There is one important caveat here Though and that's having to assume that An exchange is able to satisfy both Sides of the equation that is to say That they are not only able to verify Asset balances but also the total value Of outstanding liabilities there have Been a number of exchanges that have Referred to asset balances as their Proof of reserves when in fact they were Only one side of the equation on the Asset side of the equation wallet Addresses are public and can be observed In real time on chain however when it Comes to live liabilities these can only

Be counted at particular times which are Called Snapshots these liabilities are Agglomerated through cryptographic Methods such as Merkel tree proofs or Zero knowledge proofs quite simply these Allow each and every user to confirm That their Wallet balance was included In the most recent liability snapshot if Any user is unable to do this then it Means that they were not included and That there are outstanding unaccounted For liabilities a red flag now this only Just scratches the surface of proof of Reserves if you want a more in-depth run Through then I encourage you to peruse The writings of Nick Carter from Castle Island Ventures he's one of the foremost Experts on proof of reserves and while p Is a relatively effective way to try and Prove solvency it does have a number of Shortcomings for one these are not Audits in the traditional sense I.E They're not an account of the financial Position of an exchange and cannot Verify certain other important factors These factors include that the exchange Controls the keys that they're Practicing good risk management with Said keys that they control their key Man risk that they have strong controls Against hacks Etc that they don't have Hidden liabilities or that in the event Of insolvency customers are going to be

Senior to the claims and finally that The exchange cannot become insolvent in The future due to bad management of any Of the above okay with all of that said It's time to jump into our exchange Analysis the exchanges that we're going To be looking at today are the top four By volume and reputation rank on coin Market cap while CMC rankings shouldn't Be the be all and end all they're among The best out there for a Rough and Ready Ranking if there are other exchanges That you want us to analyze in the Future then let us know in the comments I should also say that as always this Video is not sponsored although we do Have affiliate agreements in place with Some of the exchanges full transparency So with that said let's begin our Analysis with one of the most wellknown Exchanges for us users and many others Besides coinbase now when when it comes To coinbase I don't think you need too Much background that's because most of Us are pretty familiar with the exchange And probably already have an account There now coinbase is the only crypto Exchange that's listed on a global stock Index this is important because in order To get that listing it would have needed Completely open and transparent books Coinbase's accounts are fully audited by Deoe a member of the big four of Accounting firms what what this means is

That coinbase doesn't publish or run Proof of reserves because there is the Underlying assumption that fully audited Accounts should suffice as security and This is a fair point in fact as far as We know coinbase is the only Global Exchange that has been able to secure One of the big four as an auditor Moreover publishing fully audited Accounts means that you mitigate some of Those risks that I mentioned earlier You're able to have a more complete Picture as to the financial position of The exchange but having said that you Still can't independently as a user Verify that your funds are included in a Liability snapshot you'll need to trust The veracity of a Deo audit now we have No reason to doubt the word of a major Accounting firm but it's still a point Worth noting apart from that coinbase is One of the safest exchanges out there to Our knowledge it has hasn't suffered any Sort of external hack the only ones that Tend to happen are when a hacker is able To fish their way into a users's account Another benefit of coinbase is that you Have quazi FDIC insurance for your US Dollar deposits essentially because Coinbase pools user funds at FDIC Insured Banks it means that their users Have quote pass through insurance which Covers a per user deposit limit of 250,000

However this is only for those users who Are us-based and who hold funds in US Dollar so it doesn't apply to digital Assets coinbase does say that it has Crime insurance for digital assets However but this only covers quote a Portion which means if ever the Doomsday Scenario of All Digital assets being Stolen from coinbase came to pass it Wouldn't be able to cover the shortfall But these are real edge cases we're Talking about here the chances of a Hacker getting into all of coinbase's Hot and Cold Storage should be Infinitesimally small so on balance you Can be sure that coinbase is one of the Safest exchanges out there if you don't Have an account and want to sign up then We'll leave links Down Below on to our Next exchange though and this is one of The fastest growing International Exchanges Okx for those unfamiliar okx used to be Called okay ex back in the day the Rebrand came early last year and is part Of the company's goal of expanding Beyond just a centralized exchange we've Done a complete okx review in a previous Video so the link to that will be in the Description if you want the full load Down but let's get on to the question of Security starting with OK X's proof of Reserves in the wake of the FTX collapse Okx was one of the first exchanges to

Start publishing proof of reserves it Was also the first to start using ZK Stark technology for liability Accounting now I won't go into the Specifics of how ZK Starks work as They're pretty complicated but we've Linked to materials in the description For you if you're interested since December of last year okx has been Publishing these proof of reserves on a Monthly Basis through the use of these Aforementioned ZK proofs users are able To check that their balances have been Included in the most recent snapshot I'll link to this handy guide below Which shows you exactly how to do this If you were to doubt the accuracy of okx Is internal balance checking tools then There are also other third-party tools That you could use those are also in the Description should you want to learn how To use them meanwhile on the asset side Of the equation these are onchain and so Can be independently observed and Monitored okx publishes all its exchange Addresses and you can check the balances Of these in real time using tools such As nanson for example okx is most recent P audit took place on the 18th of September and you can see it in the Dashboard over here they've broken down Their Reserve ratio by asset now for Those unfamiliar the reserve ratio is

Just a measure of solvency I.E assets Divided by liabilities over 100% Means fully backed here you can see that All assets fully cover liabilities for Those coins and tokens you can also Click through to some of the earlier P Audits and you'll see that they were Always fully backed by the exchanges Wallets when it comes to third-party Audits of these reserves that's Something easier said than done finding An auditor willing to engage with any Crypto exchange has become incredibly Hard in the wake of FTX as such okx has Been struggling to find an auditor but They remain open to any firm that will Engage when it comes to other forms of Asset security okx has also never been Hacked this could be on account of the Rigorous cold storage and hot wallet Protocols in fact a few months ago the Exchange was able to secure a s SO2 type 2 certification this is an industry Standard certification which is able to Demonstrate that the company's processes For governing its services managing Sensitive data and protecting data Privacy meet the highest Global Standards so then on balance okx appears To be a safe exchange with adequate Reserves again if you want a more In-depth breakdown then I encourage you To check out our review on it and if you Are thinking of using okx then we also

Have a great deal for coin Bureau Viewers so if you use the link down Below then we have sign up bonuses of up To2 $1,000 as well as lifetime trading Fee discounts of 40% on to our next exchange now and that Is bibit now this exchange has been Around since 2018 and is perhaps better Known for its Futures Trading platform However bybit started diversifying into Spot trading nfts and numerous other Instruments about 2 years ago the result Has been an explosion of volume now we Also have a dedicated bybit review that I've linked to below But what we're most interested in here Is of course bit's security and the Safety of its users funds bibit began Conducting proof of Reserve audits late Last year with its first Merkel tree Liability proofs taking place in December since that time it's conducted Five proof of Reserve audits in total With the latest taking place on the 14th Of August you can see exactly what that Looks like over here the reserve ratios Have been broken down per ass asset and All assets are fully backed total assets Are also verifiable on chain and can be Seen using tools like nanson here you Can see the total assets that are held By all of bit's Reserve addresses on the Liability side meanwhile you're also Going to want to check out whether your

User balance has been included in the Snapshot that's why bybit also provides The tools to do this much as with okx You can either do this on the bybit side Or you can use third-party open- Source Tools to cryptographically verify it I've linked to the guides below should That be something you want to check when It comes to comprehensive third-party Audits bybit unfortunately faces the Same challenges as okx does in this Regard that is it's not from a lack of Will or motivation to use external Auditors but rather that the Auditors Themselves don't want to work with Crypto exchanges now this is an Unfortunate State of Affairs because Comprehensive audits with would only Benefit the users of these exchanges and What's even worse is that these Auditors Have been actively discouraged by the Likes of Elizabeth Warren who've been Quick to dismiss any crypto audits as Quote shame audits it's no wonder they Won't touch crypto exchanges anyhow the Point is that bibit also doesn't have Third-party audited accounts though not For want of trying in this case the Proof of reserves and liabilities should Suffice from the perspective of solvency Audits generally help with more granular Level details as well as future exchange Solvency moving on to broader security Bybit has also never been hacked in

Addition to all the exchange level Security deployed to protect user assets Bybit also has a number of tools that Customers can make use of to prevent Unauthorized account access if you do Use bibit or any other exchange for that Matter we encourage you to use these Tools which which include whitelisted Wallet addresses two Factor Authentication preferably with a Security key anti fishing codes and Whitelisted IP addresses anyhow if you Wanted to use bybit and you don't have An account there then we also have a Deal for you we have almost $40,000 in Bonuses as well as zero maker fees for The first 30 days so if you want to take Advantage of that you know where to go Okay it's it's time now for our fourth And final exchange and that's perhaps The one that's been under the most Scrutiny recently I am of course talking About the big daddy of them all binance Now the reason why binance has been Under so much scrutiny is of course Because of all the legal challenges that It's been facing binance has been sued By the cftc and the SEC in separate Lawsuits on top of that there are still Concerns circulating that the doj could Be a about to drop something as well and Binance has also been facing battles With Regulators in other countries far And wide so it's no surprise that

Everyone in crypto has been on high Alert for any binance related news but The most important concern that Traders And users will have is solvency no Amount of regulatory action will change The fact that if liabilities are fully Backed everyone will be able to withdraw Their funds even in the event of a Crisis now binance has also published Regular proof of reserves it started its First one back in November of last year And has published monthly on since then You can see its most recent one over Here it's broken down into the Individual assets as also done by okx And bybit those assets are also fully Verifiable on chain which can also be Seen with nansen's exchange dashboard Looking at the liability side of the Equation binance has also transitioned From Merkel Tre proofs to ZK Stark Technology this allows users to not only Make sure that their accounts were Included in the snapshot but also to Confirm that all balances that have been Disclosed are correctly accounted for in The snapshot binance has tools that Allow you to check this and there are Third party tools as well all linked to Below of course So based on these P Checks it appears as if binance has all Liabilities backed one for one with Assets and so far binance has always Been able to meet withdrawal requests

Sometimes billions at a time you only Need to cast your mind back to the Pandemonium that ensued following the FTX collapse in December last year there Was a period where binance processed Over $3 billion do of withdrawals in 24 Hours a trial by fire that no other Exchange has been put through well there Was one but we all know what happened to That of course many people would like to See a complete audit of binance's books To have complete certainty but as has Become clear the Auditors just won't Engage in fact binance used to have an Auditor that worked on these proof of Reserves but the fud surrounding binance And the crypto sector more broadly led The firm to sever its ties so Unfortunately binance also has no Thirdparty independent Auditor in terms Of other security binance was the victim Of a hack back in 2019 for about $40 Million but user funds were fully Covered by The Exchange and it even led To the establishment of a dedicated fund To cover this called the safu fund However in the wake of that hack and Numerous other threats faced since then Binance has implemented rocksolid Systems not only to prevent hacks but Also to track them and assist Authorities in locating online miscreant And as is the case with bibit binance Has a number of user tools that you

Could use to make 100% sure that your Account is secure from fishing attempts Etc on balance then binance does have Its challenges it's going through the Ringer at the moment and the market is On edge as a result however what's Important to do in these circumstances Is to separate fact from fud it seems That especially on crypto Twitter Binance fud engagement baiting is Becoming almost routine for some even if Most of it is speculation it still gets The market in a Twist of course some of It isn't fud right now the court cases Are playing out and binance is in the Headlines for all the wrong reasons but It is clear that binance has gone out of Its way to prove solvency and as long as You are personally comfortable with Proof of Reserve audits even the most Severe fud shouldn't give you sleepless Nights if you somehow haven't got got an Account at binance already we also have Exclusive deals on offer there and they Are of course linked to Below that's it for most of the video Folks but I do want to once again Reiterate that there is no sex in this World that can beat self- custody you Should always keep any funds held on Exchanges to a minimum because as long As you don't control your keys you don't Control your crypto not only is this Better from the perspective of assurance

But it's also how crypto was meant to be If we collectively as a community choose To hand over responsibility of all our Coins and tokens to someone else then We've created a quasi trafi system that Satoshi most definitely would not Approve of now if you enjoyed this video Give it a like and if you want to see More hit follow if you want the very Best deals in crypto then the deals page Is where it's at and that's linked to Below in the usual spot and among other Things we have there some of the best Discounts on Hardware wallets to keep Your crypto safe okay that's it from me Till next time keep calm and hoddle [Music] On