Bitvavo: A Secure and Trusted Crypto Exchange
Cryptocurrency exchange Bitvavo has become the largest in the Netherlands and is rapidly becoming one of the largest in Europe. With this growth, the focus on security is also increasing. The platform has implemented new security features to make it nearly impossible to lose your coins in hacks and scams. And in the unfortunate event that such incidents occur, users are insured up to €100,000.
Zwaar beveiligde kluizen bij Bitvavo
Bitvavo is widely regarded as one of the safest cryptocurrency exchanges for several reasons. In a press release, the Dutch company highlighted its collaboration with industry-leading crypto security firms such as Fireblocks and Ledger Enterprise. These partnerships provide heavily secured crypto wallets for institutions, greatly minimizing the chances of successful hacking attempts. Bitvavo already uses these wallets for various cryptocurrencies and is working towards implementing them for its entire crypto offering.
The majority of customer coins are stored in cold storage wallets, which are offline wallets that cannot be hacked externally. This method of storage is inherently more secure than software-based wallets. While customers can still withdraw their coins, stealing them becomes significantly more difficult.
However, Bitvavo goes a step further by keeping backups of these wallets in bank-grade vaults. These vaults adhere to the highest security standards in the Netherlands, specifically categorized as level 4+.
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Protection in the Event of Bankruptcy
Physical security is crucial, as evident from the numerous cryptocurrency company bankruptcies in recent years. Bitvavo also faced the consequences of such bankruptcies, notably the closure of crypto lending platform Genesis due to the bankruptcy of FTX.
Bitvavo had deposited €280 million with DCG/Genesis as part of their staking service. The Chapter 11 process is still ongoing, and recent reports suggest a recovery rate of 80-100%.
During this period, customers expressed concerns about Bitvavo’s stability. However, it quickly became clear that the Dutch company had sufficient financial strength to sustain itself, thanks to sound financial policies in previous years. Bitvavo fully guarantees the outstanding amount, meaning that the company will cover any potential losses. Thus, customers can still access their funds without any issues.
Furthermore, customer assets are held by a separate foundation, ensuring the safety of cryptocurrencies in the event of the platform’s bankruptcy. Bitvavo places these assets under the custody of two distinct custodians.
Coverage up to €100,000, Alongside Personal Responsibility
If you happen to lose your funds due to someone else gaining access to your account, Bitvavo provides coverage up to €100,000. This automatic coverage does not require any additional fees but is subject to certain conditions.
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As a prerequisite, enabling two-factor authentication (2FA) is required. This feature generates a code on an external app on your phone, which you must enter while logging into Bitvavo. This additional step makes it nearly impossible for criminals to steal your coins with just your email address and password. They would also need access to the device with the 2FA app.
Combating Phishing Attacks
As Bitvavo continues to grow, the platform faces a significant number of phishing attacks. During the summer, the platform warned its users about hackers posing as Bitvavo employees.
To ensure the authenticity of Bitvavo’s emails, users can set up an anti-phishing code. This code appears at the top of each email from the platform, providing assurance when clicking on links. Note that having this code set up is not required to qualify for the compensation in case of a hack. However, it is a requirement that the hack did not occur as a result of clicking on a link in an email.
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Bitvavo also offers the option to enable an “opnameslot” (withdrawal lock). This feature prevents hackers from withdrawing coins even if they successfully breach an account. Only by initiating a transfer of at least €1 to your bank account can you regain access. This ensures that only one person can access your bank account, making your Bitvavo account extremely secure.
Bitvavo’s Expansion in the Netherlands
The Dutch exchange continues to experience rapid growth. When Binance announced the discontinuation of its services in the Netherlands, Bitvavo offered customers a switch bonus, leading to a surge in new user sign-ups. As a result, Bitvavo acquired tens of thousands of new customers.
Prior to this, Dutch competitor LiteBit announced its closure. Although not bankrupt, the company found it no longer economically viable to continue operating, mainly due to the high regulatory costs imposed by De Nederlandsche Bank (DNB). Bitvavo took over LiteBit’s customer base, allowing former LiteBit users to transfer their digital assets seamlessly and free of charge to Bitvavo.
This influx of new users combined with the platform’s existing user base of over 1 million individuals demonstrates Bitvavo’s popularity and trustworthiness.