How can I ensure that my crypto-assets are secure when trading in a certain exchange?

You cannot.

You must trust that organisation with your crypto-assets.

That means

  • trusting all the owners, all the staff, all the people allowed access to their premises (cleaners, maintenance engineers) and
  • trusting the diligence and integrity of the developers of all the software used in that organisation. Including software developed elsewhere.
  • trusting the diligence and integrity of the people who manage the internal
    computer networks and firewalls in order to prevent intrusion by outsiders and fraud by insiders.

You should carefully consider the history of exchanges such as MtGox and evaluate how you would have known not to trust them.

Since you cannot ensure the security of your assets, held for you by the exchange, you must take great care in investigating the ownership, trading history, legal jursidiction and reputation of the exchange. You should also not give them control over more money than you can easily afford to lose without hardship.

Article First Published here