Both exchanges have a high level of security. To protect accounts, 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 that you can enable. Coinbase requires customers to use it.
Bitstamp and Coinbase both report that they keep 98% of their clients’ crypto funds in a cold warehouse. This type of storage is disconnected from the internet, so it protects the crypto from hackers. The remaining funds are stored hot (internet-connected storage) for daily business purposes.
These crypto exchanges also have crime insurance policies for losses due to theft. Keep in mind that insurance only covers situations where the exchange itself is broken. If someone is able to steal your funds because they obtained your login credentials, the stock market insurance probably won’t cover that.
It should be mentioned that Bitstamp was hacked in 2015, resulting in losses of almost 19,000 Bitcoin, worth around $ 5 million at the time. None of his clients lost any funds. Bitstamp has rebuilt their trading platform from scratch, and it hasn’t been hacked since then. Coinbase, to its credit, has not experienced any data breaches by hackers.