Crypto Security and
for comprehensive sustainability and vulnerability assessment of crypto exchanges
for comprehensive sustainability and vulnerability assessment of crypto exchanges
Today, in the hyper-dynamic crypto universe, almost 190 cryptocurrency exchanges operate. Everyday, individual and professional investors and traders are faced with a number of problems in choosing the right one among exchanges for their activity.
Based on a thorough analysis of such broad risk areas as liquidity, compliance and reliability, public opinion, technical, infrastructure and cybersecurity level, CER provides all-inclusive objective crypto exchange ratings.
We save your time and effort by thousands of hours of analysis, scoring and benchmarking, all you need – just make a decision and choose the most suitable exchange.
We provide 24/7 continuous analysis of a broad complex of data. The main sources of information are real accounts opened on every crypto exchange, which constitutes provides ratings, open and closed internet sources, media, blogs, chats, etc.
Data is becoming a subject to in-depth analysis and processing using advanced approaches of economic-mathematical modeling, artificial intelligence, machine learning, linguistic programming, cybersecurity assessment and turns into inputs for our multi factor scoring model to get the most accurate estimation.
Our clients will get a high precision rating of cryptocurrency exchanges by a broad range of analyzed parameters of risk evaluation which significantly enhances their everyday decision making process.
Market data and analysis reflected through real time and benchmarking score dashboards, periodic and score reports based on comprehensive risk assessment with continuous updating. The User-friendly and easily adaptive interface, allows getting a sufficient understanding of market conditions at a first glance, which considerably enhances the timing and quality of decision-making process for successful investing and trading.
Cyber risk and vulnerability assessment reflected through real time and benchmarking score dashboards ensures safe trading and investing. Integrated alert system allows customizing sensible thresholds to get necessary warning signals on time and prevent possible cyberattacks beforehand.
Detailed news, comments and feedbacks analysis presented with benchmarking score dashboard evaluates exchange’s reputation. Timely alerts help to be more flexible and reduce sensitivity to destabilizing events.
Counterparty risk evaluation including withdrawal limits and terms displayed by real time and benchmarking score dashboards provide detailed information for effective financial transactions planning. KYC, compliance and legitimacy assessment through complex investigation and analysis of exchange’s country of registration law helps participants to assure legality of investing and trading activity.
Complex index score considers all trading infrastructure and service usability. Technical advancement level assessment and audit shows exchange’s operating sustainability and reveal any special features that enables fast order execution.
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Market liquidity refers to the extent to which a market allows coins to be bought and sold without considerable influence on price quotation, its volatility and spread widening. It’s a core parameter for a successful trading and investment exit for investors. Market liquidity is provided by market makers, traders and investors who trade extensive volumes every trading day.
A successful exchange brings together as many traders and investors as possible. The cryptocurrency market is highly decentralized and it’s pretty hard to concentrate participants all in one place, thus liquidity providing is a very challenging issue.
On this basis, the level of market liquidity concerns, especially the huge volume order execution speed, is an important part of exchange risk evaluation. Without continuously provided high liquidity, investors and traders will not be able to buy coins at the target price and volume and close their positions properly.
Quotation directly influences prices and investors’ decisions. A quoting algorithm is supposed to be purely transparent, public and easily checked. Exchange rules must be equal for all participants, no one, including the market maker, can have an advantage. A fake orders detection algorithms needs to be implemented into the exchange core matching engine, no front running should be allowed.
But quote verification is an expensive and time consuming process which demands specific knowledge and skills.
Cryptocurrency quotation is definitely not transparent. Exchanges and some key participants can have the possibility for quote manipulation, which can harm investors and traders deposits.
Kitchen Dealing Center (Kitchen) is a trading platform without direct access to the market (exchange). All transactions are performed between the bidders themselves, the company, in the case of low liquidity of one of the instruments, can itself act as a counterparty in the transaction. In the case of unfavorable situations, adjust the quotes or create technical difficulties for the trader.
On the cryptocurrency market, the situation of a Kitchen exchange is possible. In this case, the exchange in fact will be an intermediary platform between traders and real exchanges or will just create an interface and simulate an order book which consists of an absolute fraud.
Cheating-Kitchen translates into an additional risk of loss, due to artificial price squeezes and slippages. In addition, it creates a delusional decision-making environment owing to quotes and order book manipulations, which breaks investing and trading strategies. In the worst of cases, such fake exchanges and brokers create withdrawal barriers for their clients, which brings to nothing; meaning no investment or trading success.
Currently, it’s pretty common on the cryptocurrency market to profit from a temporary difference in prices by buying an asset at one exchange and simultaneously selling it in another one at a higher price. This is considered riskless profit for the investor/trader and is not an illegal operation, but it proves that the cryptocurrency market is still just developing and is not efficient yet.
To increase market efficiency, exchanges must offer a broad range of order types, allow short positions and ensure the continuity of processing orders without any technical failures. At the moment the vast majority of exchanges do not provide this level of service.
Besides, it’s necessary to make an assessment of a real technical ability to quickly provide transactions execution, which mostly differs from the speed declared by exchanges, especially deals with funds withdrawals. To do such kinds of assessments by himself, an investor needs to open an account first, thus making exchanges comparison is too complicated a process for investors.
The level of reputation and legitimacy of counterparties is also a very important issue for investors and is fundamental for the integrity of the whole market.
Today, the verification of clients’ identity and money laundering prevention process procedures are poorly developed at the vast majority of exchanges. That’s why the whole crypto market is still considered to be barely legal, which in turn creates barriers for market development.
Special attention is given to the fact that still there’s no exchange with proper procedures of identification of stolen coins on the market, which provides an opportunity for criminals to easily monetize their illegal activity.
Cryptocurrency exchange legitimacy is one of the biggest concerns for investors, because this kind of activity is still illegal in most countries.
To be able to invest and trade safely, market participants need to do a deep compliance due diligence of the exchange, which in turn demands a deep knowledge of international law.
Only thorough investigation of an exchange’s country of registration legal issues like tax code, licensing, commercial law, etc. can help to solve this problem.
Withdrawal of profits is the main goal for any investor or trader, and is the main indicator of quality and reliability of any exchange at the same time.
Currently, the withdrawal process on exchanges takes two months on average and small daily withdrawal limits are very common. In such conditions, counterparty risks are very high and reliability of exchange becoming even more important.
The Investor community needs an efficient assessment tool to analyze the current state of withdrawal processes and follow any changes to deal with it.
For the exchange’s proper functioning, all necessary information, which can influence decision making or deals with trading procedures is supposed to be publicly revealed.
Cryptocurrency exchanges very seldomly reveal such information properly. This issue together with the half-legal status of exchanges and unproved management expertise makes them very sensitive to public opinion. Even a brief negative message in public sources in front of exchange can provoke a panic and destroy prices at this exchange.
To prevent these situations, investors have to take the exchange reputation into deep consideration.
During the last two years, cryptocurrency exchanges were the subject of several cyberattacks. This, even if seldom, event causes irreparable damage to investors, traders and destroys prices on the whole market.
One of the key criteria for investors in choosing the exchange is its technical advancement and cybersecurity level. However, its evaluation is a very complex and complicated issue which can be addressed only by specialized companies, so exchange comparison on this criteria is sensibly costly for investors.