Both exchanges have a high level of security. To keep accounts safe, they offer two-factor authentication (2FA). This feature requires two forms of authentication to access an account, such as a password and a code sent to the account holder’s phone. Bitstamp offers 2FA as an optional feature you can enable. Coinbase requires that customers use it.
Bitstamp and Coinbase both report that they keep 98% of their customers’ crypto funds in cold storage. This type of storage is disconnected from the internet, so it protects crypto from hackers. The remaining funds are in hot storage (storage connected to the internet) for everyday trading purposes.
These crypto exchanges also have crime insurance policies in case of losses due to theft. Keep in mind that insurance only covers situations when the exchange itself is breached. If someone is able to steal your funds because they obtained your login credentials, the exchange’s insurance most likely wouldn’t cover this.
It’s worth mentioning that Bitstamp was hacked in 2015, resulting in losses of nearly 19,000 Bitcoin, worth about $5 million at the time. None of its customers lost any funds. Bitstamp rebuilt its trading platform from the ground up, and it hasn’t been hacked since then. Coinbase, to its credit, hasn’t sustained any data breaches from hackers.
