Is Koinly Safe? Security, Privacy & API Risks Explained (2026)
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Is Koinly safe? This is one of the most important questions crypto investors ask before connecting exchange APIs or wallet addresses to any tax software.
Because Koinly requires access to your transaction data, understanding its security model, API permissions, and privacy practices is essential before using the platform.
In this guide, we break down how Koinly handles security, what risks actually exist, and what you should realistically expect when connecting your crypto accounts.
If you’re evaluating Koinly more broadly, you can start with our full Koinly review.
How Koinly Connects to Your Exchanges and Wallets
Koinly connects to exchanges and wallets in three main ways:
- Read-only API keys
- Public wallet addresses
- CSV file uploads
Importantly, Koinly does not require withdrawal permissions.
This is the most critical safety factor.
What “Read-Only API” Actually Means
When you generate an API key on an exchange (e.g., Binance, Coinbase, Kraken), you can choose permissions.
For Koinly, you should:
- Enable read access only
- Disable trading
- Disable withdrawals
With read-only access:
- Koinly can view your transaction history
- Koinly cannot move funds
- Koinly cannot place trades
- Koinly cannot withdraw assets
This significantly limits security exposure.
Can Koinly Access or Move My Crypto?
No.
Koinly:
- Does not hold custody of your assets
- Does not have private keys
- Does not have withdrawal access (when API permissions are set correctly)
It only calculates taxes based on imported data.
This is fundamentally different from an exchange or wallet provider.
Is It Safe to Connect Wallet Addresses?
When connecting a wallet via public address:
- You are sharing public blockchain data
- No private key is exposed
- No signing authority is granted
Public wallet connections are considered low-risk because the blockchain is already publicly viewable.
How Koinly Stores Data
Like most SaaS platforms, Koinly stores user data on secure cloud infrastructure.
Security practices typically include:
- Encrypted connections (HTTPS)
- Secure server environments
- Encrypted data storage
- Account-level password protection
You should still:
- Use a strong password
- Enable two-factor authentication (2FA)
- Avoid reusing exchange passwords
What Are the Real Risks?
No software is risk-free. The realistic risks are:
- Compromised exchange API keys (if configured incorrectly)
- Weak account passwords
- Phishing attempts
- Data exposure through unrelated security breaches
The key takeaway:
The primary security risk usually comes from poor API configuration, not from Koinly itself.
How to Use Koinly Safely
To minimize risk:
- Generate read-only API keys
- Double-check that withdrawals are disabled
- Enable 2FA on both your exchange and Koinly
- Avoid sharing API keys with anyone
- Revoke unused API keys periodically
These steps dramatically reduce exposure.
Is Koinly Safe Compared to Other Crypto Tax Tools?
Most reputable crypto tax platforms operate similarly:
- Read-only access
- No custody of funds
- Cloud-based encrypted storage
Koinly’s approach is standard for the industry and does not require higher-risk permissions than competitors.
If accuracy is your concern rather than security, see our detailed Is Koinly accurate guide.
Is Koinly Safe for Large Portfolios?
For users with significant crypto holdings, the safety considerations remain the same:
- Read-only API access
- No private key exposure
- No direct fund control
High-net-worth users should apply the same security hygiene they would use for any financial platform.
Final Verdict: Is Koinly Safe?
Koinly is safe to use when configured correctly.
It does not have withdrawal access, does not hold custody of funds, and relies on read-only APIs for transaction imports. The main security responsibility lies in generating API keys with proper restrictions and maintaining strong account hygiene.
If you want to test it yourself, you can start using Koinly for free, connect one exchange with read-only access, and review how the platform works before committing further.
Want the Full Picture?
- Read our Koinly review for a complete evaluation
- See Koinly pricing explained to understand plan limits
- Review How to use Koinly for a beginner walkthrough