Crypto exchange Coinbase has been crowned as the lowest risk marketplace for trading digital assets by research firm CryptoCompare.
Coinbase secured a premium AA rating along with Gemini, Bitstamp and Binance, which also made it into the top category for exchanges, after being scored on the strength of of anti-money laundering and customer identification processes.
Popular crypto exchanges including FTX and Kraken narrowly missed out on making it into the top tier, securing an A rating.
“Coinbase Exchange provides global access to one of the deepest pools of liquidity of a regulated crypto spot exchange on over 165 assets,” commented Vishal Gupta, the head of Coinbase exchange.
He added that Coinbase, which was set up in 2012, has spent nearly a decade working on “scalable innovation, risk management and proactive security measures” for the platform.
CryptoCompare noted that the industry has come on leaps and bounds, both in terms of customer experience and compliance, since the ranking system was set up in 2019 with the aim of bringing clarity to a largely unregulated sector.
“Back then, many exchanges had sub-par security standards, poor trade execution as a result of low liquidity, and scarce regulatory oversight, all of which created unnecessary risk for investors,” commented Charles Hayter, the co-founder, and chief executive of CryptoCompare.
However, CryptoCompare noted that 35 per cent of the 150 firms surveyed still have poor or inadequate ‘Know Your Client’ checks for new customers. Over a quarter of the exchanges were found to send funds to high risk entities in more than four per cent of transactions.
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