Is CoinSpot Safe?

There are inherent risks of storing your cryptocurrencies online on popular platforms like cryptocurrency exchanges. The unfortunate security breaches and hacking attacks that have happened in recent years attest to this fact.

Therefore, it’s immensely important to check the security management practices and features on any exchange you’re about to trade on.

This includes things like performing a background check when hiring employees and giving them proper security training, complying with AML and KYC policies, complete data encryption, offline digital asset custody, keeping a reserve fund, etc.

Today, we’ll try to uncover all these things about a popular Australian crypto exchange called CoinSpot. Let’s find out whether this exchange is rightfully called the most secure platform for Australian traders.

CoinSpot’s Background

CoinSpot was launched by founder and current director Russell Wilson in Melbourne, Australia in 2013 and initially focused on Bitcoin trading. From the start, Australian traders were drawn to this platform for its user-friendly interface and basic to advanced trading options that made Bitcoin trading accessible for novices too.

Today, the exchange supports a variety of cryptocurrencies (over 90!). This not only includes popular cryptos like Bitcoin, Ethereum, Litecoin, and Ripple, but also a bunch of exciting new altcoins for the more adventurous traders.

The versatile payment methods – POLi, PayID, BPAY, and Cash Deposit (BlueShyft) – are another one of CoinSpot’s assets. As far as fees go, POLi payments are free, BPAY incurs a 0.9% fee, while cash deposits are the most expensive (2% fee) but instantaneous. The standard fee for buying and selling cryptocurrencies is 1%.

CoinSpot doesn’t have daily limits but it does have a limit per transaction. The maximum amount of BTC you can buy at once shouldn’t exceed $100,000 AUD. For other coins, the limit is $50,000 AUD per order.

In order to answer all its customers’ queries in time, CoinSpot uses ZenDesk’s services, which is one of the leading platforms in providing customer support.

Platform Security

CoinSpot has some impressive online qualifications from a number of regulatory bodies. First of all, the platform is a member of the Australian Digital Commerce Association and registered with the Australian Business Number. As such, CoinSpot adheres to the regulatory framework and guidance set by AUSTRAC – Australia’s number one AML and CTF financial regulator.

In compliance with AUSTRAC and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, CoinSpot is obliged to request a full identity check from its users before they’re allowed to deposit or withdraw money on/from the platform.

The KYC check includes providing your full name, home address, place of residence, a scanned copy of a government-issued ID, and a utility bill. CoinSpot reserves the right to monitor transaction patterns and report any suspicious activity to the authorities in charge.

All these precautions are aimed at identifying and sanctioning money laundering schemes, frauds, tax evasion, and forms of terrorism and organized crime.

Another milestone for CoinSpot marks the recent ISO 27001 award, making CoinSpot the first Australian exchange to receive this certificate. To achieve the standard set by the International Organisation for Standardisation, the platform had to undergo an external audit.

This included analyzing CoinSpot’s storage management, its employees’ records, its contractors, suppliers, clients, and products in order to identify any unregulated and sidelined business.

Account Security

Two-Factor Authentication

Although the two-factor authentication method is available on almost every single crypto exchange, it’s not an obligatory feature. Some traders feel like choosing a strong password is enough to secure their account, but we at Coinformant disagree with this foolish notion.

CoinSpot definitely agrees with us, which is why every time you log into your account, there will be a reminder at the top corner to activate 2FA.

This feature consists of adding another factor or lock to your account. Apart from your password, the second factor would be a passcode that you either receive via SMS or, a much safer alternative, through an authentication app.

Most exchanges recommend downloading the Google Authenticator App to your mobile device. You’ll have to scan the QR code and then enter the generated 6-8 digit code, i.e. your one-time passcode into the exchange to gain access to your account.

Anti-Phishing Phrase

An anti-phishing phrase is a safe word of your choice that appears every time you log into your CoinSpot account. In case it doesn’t appear or it has been replaced by a different one, you’ll know you’ve encountered a phishing site. If something like this happens, you should close the website immediately and contact the exchange.

To enable this feature click on the ‘Account’ section on your CoinSpot dashboard, then press on ‘Security’. There, you’ll find the ‘Anti-Phishing Phrase’ where you can choose a word that will be easy for you to remember and recognize. Next, the exchange will ask for your 2FA in order to save the phrase.

Conclusion

CoinSpot has built a solid reputation on the crypto market and has won the hearts of Australian traders. It doesn’t come short of its title as the safest crypto exchange in Australia, which is why it has been awarded the ISO 27001 certificate in the first place.

As a heavily regulated platform, you can expect your transactions to be closely observed for potentially illegal or fraudulent activities. There are traders who find this approach intrusive, while others feel safer to entrust their funds to an AML and KYC-compliant exchange even if they have to compromise a small part of their privacy as a result.

When it comes to account security, CoinSpot employs state-of-the-art measures for multi-signature authentication and the prevention of phishing attacks. Until now, there have been no security breaches reported or any major user complaints.