There are a lot of Bitcoin exchanges out there today, but which Bitcoin exchange is safest? In truth, there is no way to answer this. The best we can do is look at some of the things that can go wrong with an exchange, so that you understand the risks that are involved with trading. There is also another option, which is using a decentralized exchange.
Wallet Hacked
With their massive holdings of tokens, exchange wallet hacks are pretty common. This is your money, and there is no central bank to bail out the exchange with fiat currency in the event of a theft. Look for how the exchange secures its tokens, and if there are plans in place in the event of a major hack.
Legal Intervention
Many exchanges are owned by people who live in nations that outlawed cryptos. Legal investigations into exchange owners can lead to frozen funds, or worse, the potential for big losses. Be sure to understand how the exchange's ownership structure is organized.
Given the risks of dealing with a centralized exchange, many Bitcoin holders are turning to decentralized exchanges as an alternative. By using a decentralized exchange, most of the risks are eliminated, but you won't have access to the same kind of leverage that many centralized exchanges offer.
