Is Bitunix Safe? Evaluating Security Measures and User Protections

Trading crypto is risky in multiple ways, and so when you start using a new platform it’s critical to check its security measures, which is why this article will ask an important question: is Bitunix safe?

As a relatively new trading platform that’s picking up traction–it was founded in November 2021 and has been expanding since–we need to assess how it takes care of Bitunix user protection, so we’ll first take a look at the specific risks involved when investing in and trading crypto, and then run through a range of Bitunix security features.

What Are the Risks When Trading Crypto?

As an asset class and an ecosystem, crypto has a reputation for elevated risk, but where exactly do the dangers lie?

Firstly, crypto is a new and highly volatile asset class. This creates a hazard that is not entirely different to the risk associated with any other kind of trading–the danger that prices might move against you–but such risk is amplified when it comes to crypto, and the further you explore the fringes–from BTC at the center to meme coins at the edge–the greater the volatility becomes, and if you throw high leverage into the mix too, the risk rises further still.

There are also crypto risks specifically associated with DeFi, including issues such as smart contract vulnerabilities and staking token depegs–but note that Bitunix is not in this category as it’s a centralized exchange. However, on a large enough scale, these kinds of malfunctions can potentially reverberate across the entire crypto market–as during the Terra/Luna crash of 2022.

That catastrophic year also brought the collapse of FTX and other centralized platforms, revealing not only systemic fragility, but also fraud, mismanagement, and the criminal misuse of customer funds. Those last points are not unique to crypto–before Sam Bankman-Fried there was Bernie Madoff–but they’re relevant when assessing risk.

And relatedly, there are the general risks associated with any kind of online financial activity, such as phishing scams, malware, and data breaches.

Bitunix Security

So is Bitunix safe? To answer that, let’s turn to the platform’s approach to crypto exchange safety, and we can take a look through its specific security features.

First though, it’s worth noting Bitunix’s strong user growth, which has seen it expand to serve over a million customers, with daily trading volumes breaking past the $1 billion mark on multiple occasions over the past year.

These figures are not of themselves a guarantee of security, but are useful when asking, is Bitunix safe? This is because they give a positive signal–Bitunix is establishing itself as a stable platform with a strengthening reputation, and must continue to generate trust in order to increase its market share. And if you’re interested in learning more about how to use the exchange, then take a look at this guide: Getting Started With Bitunix.

Licenses Obtained

We can also check what kind of regulatory licenses Bitunix has obtained. The company is incorporated in the Seychelles, with plans to establish branches in the Philippines, Japan and the UK, and it has acquired the following licenses:

• MSB license in the US.

• MSB license in Canada.

• VASP license in the Philippines.

MSB refers to a Money Services Business, and VASP refers to a Virtual Asset Service Provider, and these kinds of licenses enable legal compliance in their respective regions. Additionally, Bitunix states that it is “currently in progress of obtaining other country licenses”.

Security Partnerships

Moving on from the issue of regulatory compliance, it’s critical also for a crypto trading platform to prioritize structural security, and minimize technical vulnerabilities. To this end, Bitunix has established some strategic partnerships that are relevant to questions of safety.

Last year, Bitunix partnered with Wallet-as-a-Service provider Cobo, in order to integrate Cobo’s technology directly into the trading platform. This means that on Bitunix, encryption is prioritized through a system called Multi-Party Computation (MPC), which is utilized in Cobo’s custody services. MPC reduces vulnerabilities by ensuring that private keys are never reconstructed at a single computation point.

And then there is the more recent Nemean Services partnership, which was announced in August as a “major security upgrade”. Nemean is a digital asset security specialist that, according to Bitunix’s description, “operates a backup system of data storage, leveraging the security benefits of the MPC model”.

Notably, Nemean is ISO 27001-certified, and SOC 2-compliant, with the former of those assurances referring to a compliance framework for information security management, and the latter referring to a compliance framework for third-party services related to client data cybersecurity.

What’s more, the arrangement with Nemean provides a $5 million insurance policy for platform users, providing coverage in the event of platform-liable loss of funds.

Proof of Reserves

Post-FTX, an understandable area of concern around crypto exchange safety regards proof of reserves, and clients need the capacity to verify that all customer funds are properly managed. As such, Bitunix makes a point of emphasizing the transparency of its reserves, stating that,

“Bitunix provides a 1:1 reserve for all user assets, and allows users to verify that Bitunix is fully reserving at least a 1:1 ratio of user assets”.

Bitunix displays a clearly broken down reserve ratio which currently displays a 409% BTC reserve ratio, 231% ETH reserve ratio, and 150% USDT reserve ratio, keeping in mind that a figure of 100% means fully funded, and the most recent audit date is visible. Additionally, on the same page, there is also a facility whereby users can verify their own on-platform assets through a cryptographic mechanism called a Merkle Tree, which is used for verifying data integrity.

Bitunix Bug Bounty

Further bolstering Bitunix user protection, in September the exchange launched an official Bug Bounty program, in partnership with a company called HackenProof. This is an open-source, public initiative that offers rewards in return for identifying vulnerabilities, with bounties ranging in value from $100 up to $10,000, according to the severity of the identified vulnerability.

HackenProof is a Web3 bounty and auditing platform that has so far this year awarded over $9.7 million in bounties, and which is also working with major crypto names including Aptos, TON, and Near.

Additional Bitunix User Protection

When interacting directly with crypto, the accepted rule is that you are fully responsible for your own tokens and transactions. Actions on the blockchain cannot be reversed, and you always need to verify all details for yourself.

This is a solid approach in general and builds good on chain habits, particularly when interacting with DeFi protocols. However, crypto is now increasingly overlapping with TradFi, and as Bitunix is a centralized platform, it offers a range of assistance to users. This means there are plenty of official guidance materials available, and additionally, there is 24/7 customer support.

Besides this, Bitunix is opposed to proxy trading–when control of an account is handed over to a third party–and has clear and comprehensive rules around abnormal trading behaviors.

Trust and Security Ratings

On cybersecurity ranking platform CER, which specializes in assessing crypto platforms, Bitunix has been awarded an overall security score of 78%, and a security rating of BBB, and in closer detail this analysis includes a score of 92% for user safety, and 100% against CER’s penetration test, which simulates an attack to test for vulnerabilities.

CER’s assessment is itself integrated into crypto market data site CoinGecko, and on that widely used platform, Bitunix received a trust score of 8/10.

Safety Tips

We’ve looked at the risks often encountered in crypto, and at the measures Bitunix takes in order to strengthen Bitunix user protections, but there are also certain habits that users themselves can adopt in order to reduce risk, so let’s finish by running through some of those.

• Use Google Authenticator. If you don’t already have the Authenticator app on your phone, then you need to download it from the Google Play Store or the Apple App Store. You can then bind it with Bitunix by–on Bitunix–clicking on Security under your user icon, from where you can find the Google Authenticator settings in the 2FA Security Level section. You’ll also find the settings for mobile and email verification there too, so you can enable maximum levels of account security.

• Use an anti-phishing code. In order to help users distinguish phishing scams–which are a constant threat in both crypto and regular banking–Bitunix lets you set up a phishing code, which will then be included in all genuine emails from the platform. To set this up, again, click on Security under the user icon, then scroll down to find the anti-phishing code option.

• Use a hardware wallet. If you’re not cashing out altogether to fiat, but you decide to take some crypto funds off Bitunix and into self-custody (ideally because you’re removing some profits), then it’s a good idea to use a hardware wallet–such as those made by Ledger and Trezor–because hardware wallets operate offline and thereby provide strong security.