Every exchange should have to earn its grade.
One page, five checks: how every exchange we grade scores, the failures that made those checks non-negotiable, and the rubric behind every grade.
We checked
- Proof of reserves
- Custody
- Regulation
- Insurance
- Incident history
We found
Not one exchange we grade clears all five checks. The most common gap is custody: almost none disclose how much of customer funds sits in cold storage.
Crypto exchanges ranked by safety grade
Ranked A to F on proof-of-reserves, custody, regulation, insurance and incident history — tap any row for the full breakdown.
- Disclosed
- Partial or unaudited
- Not disclosed
01A-Kraken
Kraken holds a Wyoming SPDI charter, CFTC and SEC registrations and two EU MiCA authorisations, and has published Merkle-tree proof of reserves verified by Armanino LLP since February 2022; it discloses no insurance-fund figure.
- Proof of reserves — Merkle-tree proof of reserves verified by third-party accountant Armanino LLP since February 2022, most recently finalised 30 June 2025 across BTC, ETH, SOL, USDC, USDT, XRP and ADA. (meets this factor)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — Wyoming Special Purpose Depository Institution charter, CFTC DCM/DCO/FCM and SEC broker-dealer/RIA registrations, and two EU MiCA CASP authorisations; settled with the CFTC for $1.25m in September 2021 and with the SEC for $30m in February 2023 over its U.S. staking-as-a-service programme, relaunching on-chain U.S. staking in January 2025. (meets this factor)
- Insurance — No insurance-fund figure is publicly disclosed. Our research found no SAFU-equivalent named fund, which is a disclosure gap rather than confirmation that none exists. (partial or unverified)
- Incident history — No confirmed major security incident found in our research; Kraken has operated since 2011 with no reported breach costing customers funds. (meets this factor)
02B-Binance
Binance publishes a self-attested proof-of-reserves page and a $1bn SAFU user-protection fund, which covered the May 2019 hot-wallet theft of about 7,000 BTC in full; it settled U.S. Bank Secrecy Act and sanctions charges for $4.3bn in November 2023 and remains under a five-year DOJ compliance monitorship.
- Proof of reserves — Publishes Merkle-tree proof of reserves covering 30-plus assets, most recently a 1 January 2026 snapshot of 636,535 BTC, but the reports are self-published rather than independently audited. (partial or unverified)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — Holds an ADGM (UAE) authorisation and, via Binance.US, money-transmitter licences in 30 states (NMLS ID 1906829); pleaded guilty to U.S. Bank Secrecy Act and sanctions violations in November 2023, paying $4.3bn and accepting a five-year DOJ compliance monitorship running to 2028. (partial or unverified)
- Insurance — SAFU user-protection fund, established in 2018 and topped up to $1bn in November 2022; it covered the May 2019 hack in full. (meets this factor)
- Incident history — About 7,000 BTC (roughly $40m at the time) drained from hot wallets on 7 May 2019; the SAFU fund covered the loss in full and no user lost funds. No platform breach of comparable scale has been reported since. (partial or unverified)
03B+Bitget
Bitget publishes a monthly open-source Merkle-tree proof of reserves showing BTC at 138% and ETH at 181%, and cites a protection fund its own sources size differently; ASIC issued an investor alert in July 2025 over unlicensed high-leverage derivatives.
- Proof of reserves — Monthly open-source Merkle-tree proof of reserves published on GitHub, showing BTC reserves at 138%, ETH at 181%, USDC at 107% and USDT at 101%. (meets this factor)
- Custody — Uses multi-signature cold storage, but the cold/hot storage split is not disclosed and we could not confirm it from a primary source. (partial or unverified)
- Regulation — Lists an AUSTRAC registration, El Salvador CNAD/BSP licences, Argentine CNV and Mexican SAT registrations, a UK FCA Section 21 approver partnership and a Swiss FINMA SRO membership, without registration numbers we could check against public registers. ASIC issued a public investor alert on 28 July 2025 over unlicensed crypto derivatives sold to Australian retail clients at up to 125x leverage, noting Bitget holds no Australian Financial Services licence; its own corporate registration is cited variously as Seychelles, Lithuania or New Zealand. (partial or unverified)
- Insurance — A protection fund is disclosed but sized inconsistently across sources — $630m in one, 6,500 BTC (implemented December 2022) in another — so no single figure is confirmed. (partial or unverified)
- Incident history — No confirmed major security incident found in our research. (meets this factor)
04B-Bybit
Bybit publishes monthly Merkle-tree proof of reserves audited by Hacken OU and holds a partial EU MiCA licence in Austria; it stayed solvent after the February 2025 theft of roughly $1.46–1.5bn — the largest exchange hack on record — replenishing reserves in full within 72 hours.
- Proof of reserves — Merkle-tree and proof-of-liabilities audits by Hacken OU, monthly since June 2024 and published as signed reports; Hacken is a crypto-security specialist rather than a Big Four financial auditor. (meets this factor)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — EU MiCA licence via Bybit EU GmbH (Austrian FMA, May 2025) covering 5 of the 10 MiCA service categories, plus provisional, non-operational VARA approval in Dubai; the UK FCA issued a public warning in February 2025 and Bybit re-entered the UK in December 2025 through FCA-regulated Archax. (partial or unverified)
- Insurance — Maintains a dedicated insurance fund backstopping derivatives liquidations, which was drawn on in the post-hack solvency response, but its standing balance is not disclosed. (partial or unverified)
- Incident history — About $1.46–1.5bn stolen in February 2025 through a Safe multisig interface phishing attack attributed to North Korea's Lazarus Group — the largest crypto exchange hack on record. Bybit remained solvent and fully replenished reserves within 72 hours, but only 3.54% of the stolen funds were ever frozen. (does not meet this factor)
05BCoinbase
Coinbase is a publicly traded, SEC-reporting U.S. company licensed in 45 states and holding a New York BitLicense, and the SEC's 2023 case against it was dismissed with prejudice in February 2025; it runs no crypto-specific proof-of-reserves programme and its last disclosed crime-insurance figure dates from 2019.
- Proof of reserves — Runs no exchange-wide proof-of-reserves programme; reserve assurance rests on its Deloitte-audited filings as an SEC-reporting public company, plus per-asset attestations for wrapped tokens such as cbBTC. (partial or unverified)
- Custody — Coinbase Custody is an NYDFS-regulated qualified custodian, but the cold/hot storage split is not disclosed and we could not confirm it from a primary source. (partial or unverified)
- Regulation — New York BitLicense, FinCEN MSB registration, UK FCA registration FRN 900635 and licences in 45 U.S. states; paid a $100m NYDFS consent order in January 2023, and the SEC's 2023 unregistered-exchange suit was dismissed with prejudice on 27 February 2025. (meets this factor)
- Insurance — A $255m crime policy covering hot-wallet assets was disclosed in 2019; Coinbase still advertises commercial crime cover for custodied assets but has not confirmed a current figure. (partial or unverified)
- Incident history — No confirmed platform-level breach of customer funds found in our research. (meets this factor)
06B-Crypto.com
Crypto.com discloses more than $870m of insurance cover, had its SEC investigation closed with no action in March 2025 and holds a Malta MiCA authorisation; its proof-of-reserves position is contested between our sources, and it reimbursed all users after a January 2022 incident that drained about $34–35m from 483 accounts.
- Proof of reserves — Our two sources conflict: one records a published proof-of-reserves portal, the other found no exchange-wide programme. No methodology, auditor or reserve figure was confirmed either way. (partial or unverified)
- Custody — Cold-storage assets sit with custodial partner Ledger Vault, but the cold/hot storage split is not disclosed and we could not confirm it from a primary source. (partial or unverified)
- Regulation — Malta MFSA MiCA CASP authorisation granted 27 January 2025 covering 6 of the 10 service categories, plus an EU Limited Financial Institution licence from 27 February 2026 for stablecoin services, and licences listed across Singapore, Canada, the UK, Australia, Hong Kong, Brazil and the U.S. without registration numbers we could check against public registers. The SEC closed its investigation with no enforcement action on 27 March 2025. (partial or unverified)
- Insurance — More than $870m of disclosed cover: $750m on cold-storage assets through custodial partner Ledger Vault, expanded September 2021, plus $120m of institutional custody insurance arranged through Aon and announced 25 June 2025. U.S. fiat balances are held at FDIC-insured Community Federal Savings Bank. (meets this factor)
- Incident history — About $34–35m taken from 483 accounts in January 2022 through a 2FA compromise; Crypto.com disclosed the breach publicly and fully reimbursed all affected users. (partial or unverified)
07BHTX
HTX publishes monthly Merkle-tree proof of reserves that excludes corporate holdings, discloses only a Pakistani no-objection certificate among its authorisations, blocked the entire EU rather than seek MiCA licensing, and faces UK FCA High Court proceedings.
- Proof of reserves — Monthly Merkle-tree proof of reserves, a run of 36 consecutive months as of October 2025 and most recently published July 2026; corporate holdings are excluded from the proof. (meets this factor)
- Custody — Cold storage is described by third-party reviewers as air-gapped with hardware security modules and multi-signature controls, but no cold/hot split is disclosed and we could not confirm one from a primary source. (partial or unverified)
- Regulation — Only a Pakistan PVARA no-objection certificate was confirmed among its listed authorisations; it holds no MiCA or UK authorisation and blocked the entire European Union from 1 July 2026 rather than seek one. The UK FCA began High Court proceedings against Huobi Global S.A. on 21 October 2025 over illegal financial promotions. (partial or unverified)
- Insurance — No insurance or safety-fund figure is publicly confirmed. That is a disclosure gap rather than confirmation that none exists. (partial or unverified)
- Incident history — About $7.9–8m (5,000 ETH) stolen in September 2023; roughly 95% was recovered by negotiation with the attacker, with a 5% white-hat bounty paid and no user losses reported. (partial or unverified)
08B-MEXC
MEXC publishes a proof-of-reserves page stating a reserve-rate methodology and cites a $100m Guardian Fund through a single source; Estonia's financial intelligence unit revoked its VASP licence in November 2023.
- Proof of reserves — The proof-of-reserves page states a reserve-rate methodology but publishes no figures we could extract; a June 2026 Hacken-audited snapshot at 114–269% coverage is reported by third parties and could not be confirmed against the primary page. (partial or unverified)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — Holds FinCEN MSB, AUSTRAC, Canadian MSB and Swiss VQF registrations — AML monitoring obligations rather than exchange licences. Estonia's Financial Intelligence Unit revoked MEXC Estonia OÜ's licence in November 2023, and a June 2024 blacklist entry surfaced in our research without a clear issuing body or stated consequence. (partial or unverified)
- Insurance — A $100m 'Guardian Fund' is cited by a single third-party source and is not confirmed by any primary MEXC disclosure. (partial or unverified)
- Incident history — No confirmed major security incident found in our research. (meets this factor)
09BOKX
OKX publishes monthly zk-STARK proof of reserves with an open-source verification tool and holds Dubai VARA and Malta MiCA authorisations, but its Seychelles operating entity pleaded guilty in the U.S. in February 2025 and paid over $504m.
- Proof of reserves — Monthly zk-STARK v2 proof of reserves — the 44th report covered $22.65bn in primary reserve assets — with an open-source verification tool on GitHub so users can check their own balances against the published Merkle root. (meets this factor)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — Dubai VARA VASP licence VL/23/12/003 and an EU MiCA CASP authorisation via OKX Europe Limited (Malta MFSA, 27 January 2025); operating entity Aux Cayes FinTech Co. Ltd. pleaded guilty in U.S. federal court on 24 February 2025 to running an unlicensed money-transmitting business and paid over $504m. (partial or unverified)
- Insurance — No insurance or safety fund is publicly disclosed beyond the proof-of-reserves programme. That is a statement about what OKX discloses, not a finding that it is uninsured — but an undisclosed fund is one a user cannot rely on. (does not meet this factor)
- Incident history — No confirmed major security incident found in our research. (meets this factor)
10C-Bitstamp
Bitstamp was the first crypto-asset service provider licensed under MiCA in Luxembourg and has been owned by Robinhood since June 2025; it custodies with BitGo but publishes neither proof of reserves nor an insurance figure, and lost about 19,000 BTC in a 2015 hot-wallet hack.
- Proof of reserves — No proof-of-reserves programme was found. Bitstamp reports SOC 2 compliance and annual Big Four accounting audits, but those are not published reserve attestations a user can check. (does not meet this factor)
- Custody — Custodies with BitGo since 10 October 2019 and roughly 95% cold storage is reported by third-party reviewers, but Bitstamp publishes no cold/hot split we could confirm from a primary source. (partial or unverified)
- Regulation — Bitstamp Europe S.A. was the first crypto-asset service provider granted a full MiCA licence in Luxembourg, by the CSSF on 16 May 2025 and passported across the EU/EEA, alongside a reported New York BitLicense; since 2 June 2025 it has been owned by Robinhood, an SEC-reporting public company. (meets this factor)
- Insurance — No insurance or safety fund is publicly disclosed. Custody sits with BitGo, whose own policy was not shown to extend to Bitstamp balances. That is a statement about what Bitstamp discloses, not a finding that it is uninsured — but an undisclosed fund is one a user cannot rely on. (does not meet this factor)
- Incident history — About 19,000 BTC stolen from hot wallets in January 2015; Bitstamp recovered and kept operating, and its current BitGo custody architecture postdates the hack by several years. One of our two sources could not re-verify the incident against a primary record. (partial or unverified)
11CdYdX
dYdX is a non-custodial perpetuals protocol where balances stay in user-controlled wallets and an on-chain insurance fund is financed by a 1% liquidation fee; it holds no exchange licence in any jurisdiction, and a March 2024 attack cost roughly $9m, about 40% of the v3 insurance fund at the time.
- Proof of reserves — Non-custodial: balances stay in user-controlled wallets and are verifiable directly on-chain, so no reserve attestation is needed. (meets this factor)
- Custody — Non-custodial protocol — it never takes custody of user funds, so there is no hot/cold split to disclose. (meets this factor)
- Regulation — Holds no exchange licence in any jurisdiction; the v4 protocol runs on its own Cosmos SDK chain under community governance, supported by dYdX Trading Inc. in San Francisco and the dYdX Foundation in Zug. U.S. and Canadian users are blocked at the interface layer rather than by any licensed entity. (does not meet this factor)
- Insurance — An on-chain insurance fund financed by a 1% fee on liquidations, verifiable on-chain but with no disclosed balance; a March 2024 attack consumed roughly 40% of the v3 fund, and a March 2025 DAO vote moved $10m USDC out of it to cover operating expenses. (partial or unverified)
- Incident history — Roughly $9m lost in a targeted attack on 5 March 2024, about 40% of the v3 insurance fund at the time; separately, a deposit-proxy vulnerability was exploited by a white hat to rescue about $2m before attackers reached it. One of our two sources recorded no confirmed incident. (partial or unverified)
12CGate.io
Gate.io holds a Malta MiCA authorisation and an EU payment-services licence, and has published Merkle-tree plus zk-SNARK proof of reserves with Armanino LLP involved since October 2022, though only its U.S. entity's figures come from a primary source.
- Proof of reserves — Has published proof of reserves since around May 2020 using a combined Merkle-tree and zk-SNARK method, with third-party involvement from Armanino LLP since 19 October 2022; only the U.S. entity's 100% ratio is primary-sourced, and the global platform's reported 124% ratio comes from third parties. (partial or unverified)
- Custody — Roughly 95% of assets in cold storage is reported by third parties, but Gate publishes no cold/hot split we could confirm from a primary source. (partial or unverified)
- Regulation — Malta MFSA MiCA CASP authorisation granted 29 September 2025 covering 6 of the 10 service categories, and a PSD2 payment-services licence from 26 February 2026, alongside a Gibraltar GFSC DLT licence and a TCSP registration listed on its own licences page without registration numbers we could check; access is restricted from roughly 30–34 countries including the U.S., UK, Canada and most of Western Europe. (partial or unverified)
- Insurance — No insurance or safety fund is publicly disclosed. That is a statement about what Gate discloses, not a finding that it is uninsured — but an undisclosed fund is one a user cannot rely on. (does not meet this factor)
- Incident history — No confirmed major security incident found in our research; Gate claims a 13-year record with no platform-level breach, and holds ISO 27001 certification alongside a CER.live AA rating of 88/100. (meets this factor)
13CGemini
Gemini is a New York-chartered trust company available in all 50 states with $100m of disclosed custody insurance, but publishes no exchange-wide proof of reserves and paid a $37m NYDFS penalty in 2024 over its collapsed Earn programme.
- Proof of reserves — No exchange-wide proof-of-reserves programme was found. Gemini holds SOC 1 Type 2 and SOC 2 Type 2 reports, with Deloitte & Touche involved, but those are controls audits rather than reserve attestations. (does not meet this factor)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — New York limited-purpose trust company charter granted in September 2015, operating in all 50 states; the February 2024 NYDFS consent order over the Gemini Earn programme carried a $37m penalty and more than $1.1bn committed back to users, alongside a $50m New York Attorney General recovery. (meets this factor)
- Insurance — Gemini Custody discloses $100m of insurance cover and Gemini operates an in-house Bermuda captive insurer; the cover is scoped to the custody product and we could not confirm it extends to retail exchange balances. (partial or unverified)
- Incident history — No confirmed breach of Gemini's own systems found in our research; the Earn programme's collapse was a lending-counterparty failure at Genesis, not an attack on the exchange. (meets this factor)
14C+KuCoin
KuCoin holds an Austrian FMA MiCAR licence passportable across 29 EEA countries but pleaded guilty in the U.S. in March 2024, paying $297m and accepting a ban since made permanent; its proof-of-reserves position is contested between our sources, and it lost roughly $280m in its September 2020 hack, with users made whole.
- Proof of reserves — Our two sources conflict: one records Hacken-audited proof of reserves running 32 consecutive months to October 2025 with coverage above 100%, the other found no proof-of-reserves programme at all. Neither could be confirmed against a primary KuCoin disclosure. (partial or unverified)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — Austrian FMA MiCAR CASP licence passportable across 29 EEA countries; operating entity Peken Global Ltd. pleaded guilty in March 2024 to unlicensed money transmission, paying $297m and accepting a two-year U.S. ban since made permanent by a March 2026 CFTC consent order. Related entities settled with the New York Attorney General for $22m in December 2023 and were permanently banned by the Ontario Securities Commission in June 2022. (partial or unverified)
- Insurance — An insurance fund covered the 16% of 2020 hack losses that was not recovered, but its standing balance is not disclosed. (partial or unverified)
- Incident history — About $280–281m stolen in September 2020; 84% was recovered through on-chain tracing, token reissuance and exchange cooperation, and the remainder covered by the insurance fund, leaving users whole. (partial or unverified)
15DBitfinex
Bitfinex is BVI-registered with no public licence register found and publishes no proof of reserves; it lost about 119,756 BTC in the August 2016 hack, and roughly $850m in commingled customer and corporate funds was seized or lost at its payment processor in 2018–19.
- Proof of reserves — No proof-of-reserves programme was found; both of our sources record none, and neither identified an independent reserve attestation of any kind. (does not meet this factor)
- Custody — Cold/hot storage split is not disclosed; we could not confirm it from a primary source. (partial or unverified)
- Regulation — No public licence register was found beyond its British Virgin Islands incorporation, and it blocks U.S. and California residents outright. Settled with the CFTC for $75,000 in 2016 and $1.5m in October 2021, and with the New York Attorney General for $18.5m in February 2021 alongside affiliate Tether. (does not meet this factor)
- Insurance — No named insurance fund was identified in our research. That is a disclosure gap rather than confirmation the cover is zero. (partial or unverified)
- Incident history — About 119,756 BTC (roughly $72m at the time) stolen in August 2016, with U.S. authorities recovering $3.6bn from the perpetrators in 2022; separately, roughly $850m in commingled customer and corporate funds was seized or lost at payment processor Crypto Capital in 2018–19 and made good from affiliate Tether's balance sheet. (does not meet this factor)
How to read these grades: each is derived from published, checkable disclosures — proof-of-reserves attestations, public regulatory registers, disclosed insurance funds and the documented incident record — using the weighted rubric below. Where an exchange does not disclose something, we mark it unverified rather than assume it. These are not audits and not investment advice; they reflect what was published as of our last review.
What we actually check
Every grade on this site comes down to these five factors, weighted as shown. No hidden criteria.
Proof of reserves
Can the exchange show — not just claim — that it holds what it owes customers, ideally with independent attestation?
Custody
Is the majority of customer funds held offline in cold storage, with the split disclosed publicly?
Regulation
Is it licensed by a recognized regulator in the markets it serves, or only registered as a money-services business?
Insurance
Is there a disclosed insurance fund or third-party coverage against theft and hacks?
Incident history
Has it avoided major security incidents — or handled one transparently and made customers whole?
Lessons from crypto's worst exchange failures
Six of the most consequential exchange collapses on record, in the order they happened.
Dates and figures are widely reported public estimates from coverage at the time, not KripZen's own audited data.
- 2014
Once the exchange handling the large majority of the world's Bitcoin trades, Mt. Gox abruptly halted withdrawals and filed for bankruptcy in Japan after disclosing that hundreds of thousands of customer and company bitcoins were gone — later attributed to theft that went undetected for years.
The lesson — Trading volume and market dominance are not safety signals. An exchange can look like the industry's center of gravity and still be hollowed out inside.
~850,000 BTC reported missing (publicly reported estimate)
- 2015
In January 2015 roughly 19,000 BTC was taken from Bitstamp's hot wallets following a targeted attack on exchange staff. Bitstamp suspended trading, rebuilt its infrastructure, and afterwards moved to third-party institutional custody with the large majority of customer assets held offline.
The lesson — What changed Bitstamp's risk profile was the rebuilt custody model, not the apology. Judge an exchange by what it did after an incident, not by how quickly it published a statement.
~19,000 BTC taken from hot wallets (publicly reported estimate)
- 2016
A security breach in Bitfinex's multi-signature wallet setup let attackers drain a large share of customer bitcoin in a single incident. The exchange spread the loss across all users' balances and later repaid affected customers over several years.
The lesson — Even a widely used, multi-signature custody setup is only as strong as the systems and partners it depends on — 'multi-sig' alone isn't a safety guarantee.
~120,000 BTC stolen (publicly reported estimate)
- 2016
The DAO was an investor-directed fund written entirely as Ethereum smart contracts: token holders would vote on which proposals received funding, with no manager in between. Its 2016 token sale gathered a large fraction of all circulating ether. In June 2016 an attacker exploited a reentrancy flaw in the code that let a participant withdraw their share: the contract sent ether out before it updated the sender's balance, so a malicious contract could call back into the withdrawal repeatedly and be paid again each time on a balance that had not yet been reduced. Roughly 3.6 million ETH was moved into a child contract subject to a holding period written into The DAO's own rules, which is what gave the community weeks to argue about a response. Ethereum's participants ultimately adopted a hard fork that moved the funds to a recovery contract. A minority rejected the fork on the grounds that the ledger should not be rewritten, and continued the original chain as Ethereum Classic.
The lesson — Code that holds funds is only as good as its ordering. The flaw was not exotic cryptography but a sequence — pay first, update the record after — and that pattern is still what auditors look for first. The aftermath matters as much as the bug: a chain can only reverse a theft if enough of its participants agree to, and that agreement is a political fact about a community, not a technical guarantee you can rely on in advance.
~3.6M ETH moved out of the contract (publicly reported estimate)
- 2017
Parity's multi-signature wallets did not each carry their own logic. To save deployment cost, every wallet was a thin contract that delegated its behaviour to one shared library contract on the network. That library had been deployed without being initialised, so its ownership was still unclaimed. In November 2017 a user claimed it and then invoked its self-destruct function, which removed the library's code from the chain. Every wallet that depended on it was left pointing at nothing: the balances still exist in the ledger, but the code that could authorise a transfer no longer does. Public estimates put the amount stranded at roughly 513,000 ETH. Nobody took the funds, and no exploit moved them; they simply stopped being reachable. Proposals to recover them by protocol change were debated and not adopted. Months earlier, a separate flaw in the same wallet software had allowed an actual theft of around 150,000 ETH by public estimates.
The lesson — Not every loss involves a thief. Shared code is a shared dependency, and a contract that delegates to a library inherits that library's failure modes without saying so on the tin. It also shows the limit of immutability from the user's side: the same property that stops anyone rewriting your balance stops anyone repairing it, and an unrecoverable mistake can be as expensive as an attack.
~513,000 ETH rendered permanently inaccessible (publicly reported estimate)
- 2018
BitConnect invited users to exchange bitcoin for its own token and lock it in a lending programme that promised steady returns, said to be generated by a proprietary trading bot nobody outside the company could inspect. A multi-level referral structure paid existing participants to recruit new ones. After state securities regulators in the United States issued cease-and-desist orders, the lending platform was shut down in January 2018 and the token's value collapsed. US authorities later charged the operation as a fraud: a promoter pleaded guilty, and the founder was indicted and reported as a fugitive.
The lesson — A fixed or guaranteed return in crypto is a claim about the future that nobody can make honestly. When the strategy behind it cannot be inspected and recruitment is rewarded, the returns are being paid by later deposits — which is a structure, not a market view, and it ends when deposits slow.
~$2.4B taken from investors (figure cited by the US Department of Justice)
- 2018
The Japanese exchange kept a large pool of a single token in an internet-connected hot wallet without a multi-signature setup. Attackers stole hundreds of millions of dollars' worth in one of the largest exchange hacks by value at the time.
The lesson — Hot-wallet convenience has a price. The safest exchanges keep the large majority of customer funds offline, precisely so one breach can't drain everything.
~$530M in NEM (XEM) stolen (publicly reported estimate)
- 2019
On 7 May 2019 attackers withdrew roughly 7,000 BTC — about $40 million at the time — from a Binance hot wallet in a single transaction, using stolen API keys and phished credentials. Binance covered the entire loss from its Secure Asset Fund for Users, and customer balances were left untouched.
The lesson — A reserve funded before a breach turns a hack into an accounting entry rather than a customer loss. Check that the fund exists and is disclosed today, not that one is promised afterwards.
~7,000 BTC (~$40M at the time) taken from a hot wallet (publicly reported estimate)
- 2019
Across 2018 and 2019 Bitfinex had roughly $850 million of commingled customer and corporate money sitting with its payment processor, Crypto Capital Corp, whose accounts were seized by authorities in several countries. Affiliated stablecoin issuer Tether's reserves covered the gap; both firms settled with the New York Attorney General for $18.5 million in February 2021 without admitting wrongdoing.
The lesson — The crypto never moved — the fiat leg did. Ask which outside company actually holds the cash side of an exchange's balance sheet, because that firm's legal problems become yours.
~$850M in commingled customer and corporate funds (publicly reported estimate)
- 2019
Canada's largest exchange at the time told customers it could no longer access roughly CA$190M in funds after its founder died while allegedly holding sole control of the cold-wallet keys. A later court-appointed investigation found many of the wallets had been empty long before his death, pointing to mismanagement and likely fraud rather than a pure accident.
The lesson — Single-person key control is a structural failure waiting to happen — deliberate or not. A credible custodian never lets access depend on one individual.
~CA$190M in customer funds inaccessible (publicly reported estimate)
- 2020
On 25 September 2020 attackers drained roughly $281 million from KuCoin's hot wallets. About 84% was recovered over the following weeks through on-chain tracing, token issuers freezing and reissuing supply, and blacklisting by other exchanges. KuCoin's insurance fund covered the remainder, and users were made whole.
The lesson — That recovery depended on other people's goodwill — issuers willing to freeze tokens and venues willing to blacklist addresses. Treat it as a favour the industry granted, not a protection you can count on.
~$281M drained from hot wallets (publicly reported estimate)
- 2022
The crypto lending platform froze all customer withdrawals during a market downturn and filed for bankruptcy weeks later. Its founder was subsequently charged with, and later pleaded guilty to, fraud for misrepresenting the platform's risk to depositors.
The lesson — A platform paying yield on deposits is taking risk with your money somewhere. 'Where' and 'how much' are the questions a safety review has to ask before the good times end.
Withdrawals frozen for roughly $4.7B in customer assets (publicly reported estimate)
- 2022
On 20 January 2022 roughly $34 million in bitcoin, ether and other assets was withdrawn from 483 Crypto.com customer accounts. The withdrawals were approved without two-factor authentication being properly enforced. The company paused withdrawals, rebuilt the authentication flow, and reimbursed every affected user.
The lesson — Two-factor authentication only protects you where the platform actually enforces it. The control existed here; the gap in enforcing it on the withdrawal path is what cost money.
~$34M withdrawn from 483 accounts (publicly reported estimate)
- 2022
One of the largest exchanges globally collapsed within days after reporting revealed customer deposits had been comingled with, and lent to, a sister trading firm. Its founder was later convicted on multiple counts of fraud.
The lesson — Scale, celebrity endorsements and slick branding say nothing about whether customer funds are actually segregated from the company's own trading book.
Billions of dollars in customer funds misused (publicly reported estimate)
- 2022
The Ronin bridge, which connected the Axie Infinity game's sidechain to Ethereum, was drained in March 2022 after attackers gained control of a majority of the small validator set whose signatures authorised withdrawals. Nothing was broken in the contract: the withdrawals were validly signed by the keys the system trusted. The loss was only discovered days later, when a user reported being unable to withdraw. US authorities subsequently attributed the theft to the North Korea-linked Lazarus Group.
The lesson — A bridge is only as decentralised as its signer set. When a handful of keys can authorise every withdrawal, compromising those keys is the whole attack — and if nobody is watching the balance, it can take days for anyone to notice the money has gone.
~$600M in ETH and USDC (publicly reported estimate)
- 2022
TerraUSD was an algorithmic stablecoin that held its dollar peg not with reserves but with a mint-and-burn link to LUNA, the network's own volatile token: a UST below a dollar could always be exchanged for a dollar of newly created LUNA. In May 2022 the peg slipped and that mechanism worked in reverse — restoring it required minting ever more LUNA, which crushed LUNA's price and destroyed the very value the peg depended on. Both assets collapsed within days, and Terraform Labs and its founder later faced criminal and civil proceedings in the United States and South Korea.
The lesson — A peg backed by a token the same system issues is circular. It holds while confidence holds and offers nothing to fall back on when confidence goes — which is the moment a stablecoin is supposed to be useful. High advertised yields on a stablecoin are a description of that risk, not a feature.
UST and LUNA lost effectively all of their value
- 2022
Three Arrows Capital was a Singapore-based hedge fund that had become one of the largest borrowers in crypto, funding leveraged positions with loans from centralised lending desks. It held a substantial position in Terra's ecosystem, which lost effectively all of its value in May 2022, and it was exposed to other trades that moved against it as prices fell. When lenders issued margin calls in June 2022 the fund could not meet them. A court in the British Virgin Islands ordered its liquidation at the end of that month, and the liquidators sought recognition in the United States shortly after. The default did not stop at the fund: several of the lending platforms that had extended it credit disclosed losses, and some of them subsequently entered bankruptcy themselves. Singapore's regulator later issued prohibition orders against its founders.
The lesson — Contagion in crypto is not mystical; it is a lending chain. A platform offering you a yield is lending your deposit to somebody, and the concentration of its loan book is the risk you are actually taking. That book is rarely published, so the question worth asking of any yield product is who the borrower is and what happens to your money if that borrower defaults.
Creditor claims of roughly $3.5B in the liquidation (publicly reported estimate)
- 2022
Wormhole, a bridge issuing wrapped assets across several chains, lost roughly 120,000 wrapped ether in February 2022 when an attacker exploited a flaw in how its Solana-side contract verified the guardian signatures that authorise a mint. The attacker was able to produce a mint that the contract accepted without a matching deposit on Ethereum, leaving the wrapped tokens undercollateralised. Jump Crypto, which backed the project, replaced the missing ether so that holders of the wrapped asset were made whole.
The lesson — A wrapped token is a claim that something is held elsewhere. When the check that enforces that link is broken, the token keeps circulating and looking normal while the collateral behind it no longer exists — and whether users are made whole comes down to whether somebody with a balance sheet chooses to step in.
~120,000 wrapped ETH (publicly reported estimate)
- 2023
On 24 September 2023 roughly 5,000 ETH — about $8 million — was taken from a single HTX hot wallet. The exchange identified the attacker, negotiated the return of 95% of the funds and paid the remaining 5% as a white-hat bounty. Customer balances were covered in full.
The lesson — Negotiating money back worked because the amount was small and the trail was public. That is an outcome, not a security control — no exchange can promise you the next attacker will take the deal.
~5,000 ETH (~$8M) taken from a hot wallet (publicly reported estimate)
- 2024
On 31 May 2024 DMM Bitcoin, a Japanese exchange registered with the Financial Services Agency, reported an unauthorised outflow of 4,502.9 BTC — worth roughly $300m at the time and one of the largest thefts in the country's history. The company said it would procure the equivalent bitcoin with support from the wider DMM group so that customer holdings were fully covered, and Japan's FSA issued a business improvement order. In December 2024 US and Japanese agencies publicly attributed the theft to North Korea-linked actors, and DMM announced it would cease its crypto business and transfer customer accounts to SBI VC Trade.
The lesson — Registration and a solvent parent decided how this ended, not whether it happened. Japan's regime is among the strictest anywhere and the coins still left; what the rules and the group balance sheet bought was that customers were repaid rather than queued as creditors. Read a licence as a statement about who absorbs the loss, never as a claim that the loss is prevented — and note that the exchange itself did not survive being made whole.
4,502.9 BTC (~$300m at the time, company-reported)
- 2025
On 21 February 2025 attackers moved roughly $1.46 billion of ether and staked ether out of a Bybit cold wallet by manipulating what signers saw in a Safe multisig interface, so legitimate keyholders approved a transfer that was not what it appeared to be. The FBI attributed the attack to North Korea's Lazarus Group.
The lesson — No key was stolen — the approval screen lied. Cold storage and multisig only help when every signer can verify, independently of that screen, what they are actually authorising.
~$1.46B in ETH and staked ETH (publicly reported estimate)
No key was stolen — the approval screen lied. Cold storage and multisig only help when every signer can verify, independently of that screen, what they are actually authorising.
How we grade
The rubric behind every Safety Grade on this site, and why a paid partnership can't buy a better one.
Every exchange we ever cover — sponsor or not — is scored against the same five factors, weighted the same way. A paid partnership can get an exchange listed faster. It cannot buy a better grade.
- Proof of reserves
- 30%
- Custody
- 25%
- Regulation
- 20%
- Insurance
- 15%
- Incident history
- 10%
This Safety Grade is a narrower, faster read than our full exchange review, which also covers fees, coins and support. Read our full editorial policy →
The A–F scale
- A
Meets every factor at a high bar: independently verified reserves, disclosed cold-storage custody, real licensing, insurance, and a clean record.
- B
Strong on most factors, with at least one gap — usually self-attested reserves or registration instead of full licensing.
- C
Average. Some disclosure, but several factors are thin, self-reported, or unverifiable.
- D
Multiple real gaps — undisclosed custody, no regulation, no insurance — even without a known incident.
- F
Either a confirmed history of major incidents, or enough structural red flags that we can't responsibly recommend it.
Coin guides
Plain-English risk levels for the assets people ask about most — not investment advice, just what to know before you buy.
Aave
DeFi governance token
A decentralised lending protocol where deposits sit in shared pools and borrowers take overcollateralised loans against assets they lock, with interest rates set by how much of a pool is in use.
Why this risk level
- Loans are overcollateralised and enforced by contract: if the value of your collateral falls far enough relative to what you borrowed, anyone may liquidate part of the position and take a bonus for doing it
- Deposits are not insured — the risks are smart-contract failure, an oracle reporting a wrong price, and market moves too fast for liquidators to clear bad debt
- AAVE is a governance token used to vote on protocol parameters and to backstop the system under its safety module; it is not a deposit account and not a claim on the pools
Algorand
Smart-contract platform
A smart-contract network whose consensus draws a fresh random committee for every block and finalises it on the spot, so the chain never reorganises and confirmations are not a waiting game.
Why this risk level
- Block producers and voters are selected by a cryptographic lottery weighted by stake, and the selection is verifiable after the fact but not predictable in advance, which is what makes targeting a specific proposer difficult
- Finality is immediate rather than probabilistic: once a block is agreed it is not revisited, so applications do not need a confirmation count before treating a payment as settled
- ALGO pays transaction fees and is the stake that weights the lottery; participation does not require locking coins away from the account that holds them
Aptos
Smart-contract platform
A proof-of-stake layer-1 launched in October 2022 by engineers from Meta's abandoned Diem project, built around the Move programming language and an execution engine that processes independent transactions in parallel rather than one after another.
Why this risk level
- Move is the distinguishing feature rather than the marketing: assets are represented as typed resources that the language itself forbids from being copied or silently discarded, which removes at the language level a category of bug that Solidity contracts have to be audited for
- The pitch is parallel execution — transactions that do not touch the same state are processed simultaneously — so throughput claims should be read as a ceiling under favourable conditions rather than a rate you will observe on a busy day
- The chain launched with a large share of the supply allocated to the core team, early investors and the foundation, released on a multi-year unlock schedule, so circulating supply has risen on a published timetable independently of demand
- It competes directly with several other well-funded Move and parallel-execution chains for the same developers, and an ecosystem's depth — not its benchmark numbers — is what determines whether a chain retains them
Arbitrum
Scaling network
An optimistic rollup that executes transactions off the Ethereum main chain and posts the results back to it, so users pay Ethereum-level security costs only once per batch.
Why this risk level
- Transactions are ordered by a sequencer and settled on Ethereum, so fees are far lower than transacting on Ethereum directly while the final record still lives there
- Withdrawals back to Ethereum pass through a challenge window measured in days, during which a fraud proof can dispute the posted result — bridges that offer instant exits are third parties taking that risk for a fee
- ARB is a governance token for the protocol's DAO; it is not the network's gas token and does not confer a share of sequencer revenue
Avalanche
Smart-contract platform
A proof-of-stake smart-contract platform designed around fast transaction finality and the ability for projects to run their own separate, application-specific chains.
Why this risk level
- Transactions reach final settlement in seconds rather than minutes
- Projects can launch their own chains with custom rules instead of sharing one congested network
- The developer and application ecosystem is meaningfully smaller than Ethereum's, which affects both available liquidity and the maturity of the tooling
Bitcoin
Store of value
The original cryptocurrency and still the largest by market value, with over fifteen years of continuous operation and no successful attack on its core network.
Why this risk level
- Longest track record of any crypto asset by a wide margin
- Most decentralized and battle-tested validator (miner) set
- Still far more volatile than traditional stores of value like gold or bonds
- Supply is capped at 21 million coins — the scarcity argument rests on that cap, not on any yield the asset pays
Bitcoin Cash
Payments
A network created by a 2017 hard fork of Bitcoin, taking the opposite side of a long argument about whether to scale by enlarging blocks or by moving activity to other layers.
Why this risk level
- Larger blocks fit more transactions per block, which keeps on-chain fees low while activity is modest; the cost is a heavier chain to store and relay, which raises the bar for running a full node over time
- The fork was contentious rather than technical housekeeping: everyone holding at the fork block held on both chains afterwards, and the two have followed separate development paths since
- BCH pays fees and is the unit of account on its own chain; it is a distinct asset from BTC despite the shared history and the similar proof-of-work design
BNB
Exchange token
The token issued by Binance: it discounts trading fees on the exchange and pays transaction costs on BNB Chain, so its usefulness is tied to one company.
Why this risk level
- Its main uses — fee discounts and BNB Chain gas — both depend on Binance's own products
- Regulatory action against the issuing exchange is a direct risk to the token, not a separate one
- Supply is reduced by scheduled burns run by the issuer rather than by a fixed protocol rule
Cardano
Smart-contract platform
A proof-of-stake smart-contract platform whose development is driven by peer-reviewed academic research, which makes it deliberate and slow-moving by design rather than by accident.
Why this risk level
- Ran proof-of-stake from launch, years before Ethereum switched to it
- Smart contracts only arrived in 2021, well after the network itself launched
- The research-first process trades shipping speed for formal review — judge it on delivered features, not roadmaps
Celestia
Data availability network
A network launched in October 2023 that does one job on purpose: it accepts data from other chains, orders it and guarantees it was actually published, leaving execution and settlement to whoever builds on top.
Why this risk level
- It is the clearest working example of the modular thesis — that ordering data, executing transactions and settling results need not happen on the same chain — so understanding Celestia is largely understanding whether that separation is worth its extra moving parts
- Light clients use data availability sampling, downloading small random pieces of each block to gain statistical confidence that the whole block was published, which is what lets ordinary hardware verify publication without storing everything
- TIA's demand is unusually legible: it is paid for blockspace by the rollups that post data there, so the asset's usage tracks the number and activity of chains that chose this network rather than an application economy of its own
- That same clarity is the risk. Data availability is a competitive market with well-funded alternatives including Ethereum's own blob capacity, and a rollup can migrate its data layer far more easily than users can migrate a chain
Chainlink
Oracle network
A network of independent operators that delivers outside information — most often prices — into smart contracts, which cannot fetch data on their own.
Why this risk level
- Smart contracts have no way to read the outside world, so an oracle is infrastructure, not decoration
- LINK is what pays the node operators who supply and secure that data
- It is a service layer rather than a blockchain, so its usage rises and falls with the DeFi apps built on top
Cosmos
Interoperability network
A framework and messaging standard for building independent blockchains that can pass tokens and messages to one another, rather than a single chain that hosts every application.
Why this risk level
- Chains built with the Cosmos SDK run their own validators and set their own rules, so a problem on one does not automatically become a problem on the others
- The Inter-Blockchain Communication protocol moves assets between connected chains without a custodian holding them in the middle
- ATOM secures and governs the Cosmos Hub specifically — it is not a claim on the other chains in the ecosystem, and holding it does not entitle you to their fees
Curve DAO
DeFi governance token
A decentralised exchange launched in 2020 and specialised in swapping assets that are supposed to trade at the same value — stablecoins, staked and unstaked versions of the same coin — plus a governance token whose influence is bought with time rather than size alone.
Why this risk level
- Its pricing curve is the point: an exchange designed for assets expected to stay near parity can concentrate liquidity around that parity and quote far tighter prices than a general-purpose pool, which is why stablecoin swaps and staked-asset pairs congregated there
- CRV introduced vote-escrow to DeFi — lock the token for a period up to several years and receive voting power and boosted rewards in proportion to the time committed — a design widely copied because it prices governance influence in patience instead of purely in capital
- Because those votes direct where token emissions flow, other protocols bid for them, creating a secondary market in Curve governance that is a case study in how one protocol's incentives become another's operating cost
- The history is instructive on risk rather than reassuring: a July 2023 reentrancy exploit hit pools built with specific affected compiler versions, and later that year the founder's large CRV-backed borrowings became a market-wide stress event in their own right
Dogecoin
Meme coin
Started in 2013 as a joke based on an internet meme, with no roadmap or scarcity mechanism comparable to Bitcoin's — its price is driven almost entirely by sentiment.
Why this risk level
- Unlimited supply — there is no maximum cap, unlike Bitcoin's fixed 21 million
- Price history is dominated by social-media-driven spikes and crashes
- Treat it as pure speculation on attention and sentiment, not an investment thesis
Ethereum
Smart-contract platform
The leading platform for smart contracts and decentralized apps — most of DeFi, NFTs and stablecoin activity runs on it or a network derived from it.
Why this risk level
- Large, active developer ecosystem and the deepest liquidity outside Bitcoin
- Moved to proof-of-stake in 2022, cutting its energy use by well over 99%
- Network fees can spike sharply during congestion, and smart-contract bugs are a real risk for anything built on top
Ethereum Classic
Smart-contract platform
The continuation of the original Ethereum ledger by participants who rejected the 2016 hard fork that reversed The DAO theft, on the principle that a ledger should not be rewritten.
Why this risk level
- Both chains share every block before the split, so the difference is not the technology but a decision about whether an exceptional intervention was legitimate
- Ethereum Classic kept proof of work when Ethereum moved to proof of stake, and a smaller share of mining power makes a chain cheaper to attack — this network has suffered documented deep reorganisations
- ETC pays gas on its own chain and is a separate asset from ETH; the two have not shared an upgrade path since 2016
Filecoin
Storage network
A network that turns file storage into an open market: clients pay providers to hold data, and providers must keep proving to the chain that the data is still there.
Why this risk level
- A storage deal is enforced by two cryptographic proofs — one that the provider encoded the client's specific data, and one submitted repeatedly over time that they still hold it — with staked collateral slashed for failing them
- The chain stores the deals and the proofs, not the files, so retrieval speed and availability depend on the provider you contracted with rather than on the protocol
- FIL pays for deals and gas and is the collateral providers must lock to take on storage; the price of a deal is negotiated in the market rather than set by the protocol
Hedera
Smart-contract platform
A public ledger that records transactions in a gossip-based graph rather than a chain of blocks, and whose consensus nodes are run by a defined council of named organisations.
Why this risk level
- Consensus comes from nodes gossiping about what they heard and when, from which each node can compute the same ordering without a leader — a different construction from a chain of blocks, with fast finality as the design goal
- Governance is explicitly not open: a council of named organisations operates the consensus nodes and votes on protocol and pricing, which is a trade of permissionless participation for accountable, identified operators
- HBAR pays transaction and service fees and is the asset staked to nodes; the network exposes fixed-fee services such as consensus timestamping and token issuance alongside EVM-compatible contracts
Lido DAO
Liquid staking
A protocol that pools deposited ether, stakes it through a curated set of node operators, and issues a transferable token that represents the staked position.
Why this risk level
- Staking directly means running or trusting a validator and accepting that the stake is not liquid; the protocol's answer is a receipt token that can be moved and used elsewhere while the underlying stake stays with the validators
- The risks are stacked: the smart contracts, the operator set chosen by governance, validator penalties, and the possibility that the receipt token trades away from the value of what it represents
- LDO is a governance token, not the staked asset — it votes on the operator set and protocol parameters and does not itself carry a claim on staked ether
Litecoin
Payments
One of the oldest surviving cryptocurrencies, launched in 2011 from Bitcoin's codebase with faster blocks and a larger maximum supply.
Why this risk level
- Running with few protocol changes since 2011 gives it an unusually long, uneventful uptime record
- Blocks arrive roughly every 2.5 minutes against Bitcoin's ten, and the supply cap is 84 million rather than 21 million
- It has far less developer activity and narrower merchant use than its age might suggest
Monero
Privacy
A network that conceals sender, receiver and amount by default, unlike Bitcoin, where every transaction is permanently public and traceable.
Why this risk level
- Privacy is the default rather than an option a user has to switch on
- Many regulated exchanges have delisted it, so buying and selling can be harder and less liquid
- The same properties that protect ordinary users also attract regulatory scrutiny in most major markets
NEAR Protocol
Smart-contract platform
A proof-of-stake smart-contract platform that splits its workload across shards and uses readable account names instead of raw hexadecimal addresses.
Why this risk level
- Accounts can be human-readable names rather than long hex strings, which removes some of the copy-paste risk but introduces the familiar problem of lookalike names
- An account can hold several access keys with different permissions, so a key limited to one contract can be used day to day while a full-access key stays offline
- NEAR pays transaction fees and is staked to validators; delegating it carries slashing and lock-up conditions set by the protocol, not by whoever markets the yield
Optimism
Scaling network
An optimistic rollup that executes transactions off Ethereum and settles them there, built on an openly published stack that other networks also run.
Why this risk level
- Fees are paid in ether on the rollup rather than in OP, and the transactions still settle to Ethereum, which is where the final record lives
- Withdrawing directly to Ethereum passes through a challenge period measured in days; anything faster is a third-party bridge or liquidity provider taking that risk for a fee
- OP is a governance token in the Optimism Collective, including funding decisions for shared infrastructure — it is not a share of any chain's fee income
Polkadot
Interoperability network
A network where separate specialised chains connect to a central relay chain and borrow its security instead of each having to recruit validators alone.
Why this risk level
- A new chain inherits the shared validator set rather than bootstrapping its own security from zero
- The way connected chains get and keep their slot has been redesigned more than once, so check current rules
- Building on it requires a specific technical stack, which narrows the pool of developers compared with Ethereum tooling
Polygon
Scaling network
A scaling network that processes transactions cheaply alongside Ethereum, aimed at applications for which Ethereum's own fees are prohibitive.
Why this risk level
- Transaction costs are a small fraction of Ethereum's, which makes small everyday transfers practical
- Its main chain runs its own validator set, so it does not inherit Ethereum's security wholesale
- The network token was renamed and migrated from MATIC to POL, so older guides and tickers can mislead
Shiba Inu
Meme coin
A meme token launched on Ethereum in 2020 with an extremely large supply, whose price is driven by social attention rather than by any underlying revenue.
Why this risk level
- It is an ordinary Ethereum token, not its own blockchain, and was created without any funding round or product
- The supply is enormous, so a very low unit price says nothing about how cheap it is
- Treat it as a bet on continued attention — there is no cash flow or protocol fee underneath it
Solana
Smart-contract platform
A high-throughput blockchain built for speed and low transaction fees, popular for trading apps and consumer-facing crypto products.
Why this risk level
- Has suffered multiple network outages over its history, some lasting hours
- Price has historically swung more sharply than Bitcoin or Ethereum across market cycles
- Faster and growing, but with a more concentrated validator set than Ethereum today
- Everything runs on one chain rather than on rollups above it, so an outage stops the whole network at once rather than a single layer
Stablecoins
Stablecoin
Tokens designed to track the value of a fiat currency, usually the US dollar — useful for moving value without crypto's usual price swings, but you're trusting the issuer's reserves.
Why this risk level
- Value is only as solid as the issuer's reserve backing and how often it's audited
- Major issuers publish reserve attestations at different frequencies and levels of detail — read them before relying on one
- A stable price is not the same as a risk-free asset; issuer or regulatory problems can still break the peg
Stellar
Payments
A payment-focused ledger designed to move value between currencies, where assets other than its native token are issued by named organisations that promise redemption.
Why this risk level
- Holding an issued asset on Stellar means opening a trustline to that issuer, so the credit risk is the issuer's — the ledger records the balance but does not guarantee the redemption behind it
- Consensus comes from a federated agreement between chosen validator sets rather than mining, so transactions settle in seconds and fees are a small fixed amount rather than an auction
- XLM pays those fees, meets the minimum balance every account must hold, and is the bridge asset for path payments; it is not a claim on any issuer's reserves
Sui
Smart-contract platform
A smart-contract network that models state as individually owned objects rather than one global account table, which lets transactions that touch nothing in common be processed at the same time.
Why this risk level
- A transfer involving only objects one address owns does not need the network to agree on an ordering against everyone else's transactions, so it can take a faster settlement path than one touching shared state
- Contracts are written in Move, a language designed so that assets are types the compiler tracks — a resource cannot be silently copied or dropped, which removes a family of bugs at the language level rather than the audit level
- SUI pays gas and is staked to validators; storage is paid for up front with a portion refunded when data is deleted, so the cost model differs from chains that charge only per transaction
Tezos
Smart-contract platform
A smart-contract network built so that changes to its own protocol are proposed, voted on and installed by the chain itself, rather than agreed off-chain and shipped as a fork.
Why this risk level
- Amendments run through fixed on-chain periods — proposal, exploration, testing, promotion — so an upgrade either passes the vote or does not happen, and the chain does not split into two versions
- Consensus is proof-of-stake: holders may run a validator or delegate their stake to one without transferring ownership of the coins, and validators face penalties for signing conflicting blocks
- XTZ pays transaction fees, is the asset that is staked or delegated, and is the unit that voting weight is measured in — governance rights come from stake rather than from a separate token
The Graph
Indexing network
A network that indexes blockchain data into queryable APIs called subgraphs, so applications can ask structured questions instead of scanning every block themselves.
Why this risk level
- Reading raw chain data is slow and awkward, so indexers run the software that transforms it into a queryable form and are paid query fees for serving results
- Accuracy is backed by stake: indexers lock tokens that can be slashed if they are shown to have served incorrect data, and curators and delegators signal which subgraphs and indexers deserve traffic
- GRT is the staking asset and the unit query fees are paid in; the network serves data about other chains and does not settle transactions of its own
Toncoin
Smart-contract platform
A smart-contract network whose design splits work across many shards, with contracts communicating by asynchronous messages rather than direct calls within one global state.
Why this risk level
- Shards can split and merge with load, which is the network's answer to congestion, and it means throughput is a property of how work distributes rather than of one shared queue
- Contracts talk by sending messages that arrive later, so developers cannot assume a call and its result happen in the same instant — a real difference from EVM-style programming that changes how applications are written
- TON pays fees, is staked by validators, and is used for the network's naming and storage services; the project originated at Telegram, was abandoned by the company after a US regulatory action, and has since been continued by an independent community
TRON
Smart-contract platform
A smart-contract network known mainly for cheap, fast stablecoin transfers, secured by a small elected set of validators rather than an open one.
Why this risk level
- Carries a very large share of global USDT transfer volume because fees are low
- Block production sits with a small elected validator set, so control is far more concentrated than on Bitcoin or Ethereum
- Closely associated with founder Justin Sun, whose ventures have drawn repeated regulatory attention
Uniswap
DeFi governance token
The governance token of one of the largest decentralised exchanges, where trades are executed by smart contracts rather than by a company's order book.
Why this risk level
- The protocol runs on-chain, so you trade from your own wallet without depositing with a custodian
- UNI grants votes on protocol decisions, not an automatic share of the fees traders pay
- Trading on it exposes you to smart-contract risk and to whatever token you choose to swap into
VeChain
Supply-chain network
A chain aimed at enterprise record-keeping — product provenance, logistics, certification — built on a two-token model that separates the asset held from the asset spent on fees.
Why this risk level
- Holding VET generates a second token over time, and that second token is what pays for transactions, so an application's running cost is decoupled from the market price of the asset its operator holds
- The consensus is an authority model: a limited set of known, vetted masternodes produces blocks, which suits organisations that want an identifiable operator set and is a deliberate step away from open participation
- The chain records claims that originate off it — a scan, a sensor reading, a certificate — so its guarantee is that a record was not altered afterwards, not that the record was true when written
Wrapped Bitcoin
Wrapped asset
An Ethereum token meant to be backed one-for-one by bitcoin held in custody, so bitcoin can be used inside Ethereum applications.
Why this risk level
- It lets bitcoin act as collateral in Ethereum DeFi, which the Bitcoin network itself cannot do
- You hold a claim on a custodian's reserves, not bitcoin — the custodian is the single point of failure
- The custody arrangements behind it have changed since launch, so confirm who holds the backing today
XRP
Payments
Designed for fast, low-cost cross-border settlement, and closely tied to Ripple, the company most associated with promoting it.
Why this risk level
- Years of US regulatory uncertainty preceded a 2023 court ruling that clarified some — not all — aspects of its legal status
- Price and trading volume are heavily influenced by the issuing company's own actions and announcements
- Real-world payment adoption claims are easy to overstate — read past the headlines
Zcash
Privacy
A payments chain that offers two kinds of address — transparent, which behaves like Bitcoin, and shielded, where a zero-knowledge proof validates a transfer without revealing sender, receiver or amount.
Why this risk level
- A shielded transaction proves to the network that it is valid and balanced without publishing what it contains, which is a different approach from mixing transactions together to obscure them
- Privacy is opt-in, so the size of the shielded pool matters: value moved between a transparent and a shielded address leaves a visible edge, and a mostly-transparent chain gives shielded users a smaller crowd to blend into
- ZEC pays fees and is the transferred asset; the same coin can sit in either kind of address, and the choice of address is what determines what the chain reveals
Next
Take it further
Run the checks yourself, or look up anything on this page that needs defining.