Cryptocurrency is widely adopted among the global people. The Crypto industry is growing exponentially with the latest advancements like Defi, NFT, & DAO, etc. Cryptocurrency is conceded in 2013, the Bitcoin is first and foremost crypto in the early phase of cryptocurrency. In earlier days cryptocurrency was susceptible to online theft/ hackings. People were scared of losing their digital assets like Bitcoin.
Even large cryptocurrency exchanges faced security issues on storing their cryptocurrencies on their exchange platform. Once stolen cryptocurrencies can’t be reverted back. These were the main underly issues faced by the cryptocurrency exchanges.
The present cryptocurrency exchanges are keenly focussing on the digital assets of their users to store them in a secure way. While developing a cryptocurrency exchange very conscious of the security features of the trading platform.
Online platforms are more susceptible to hacking/ theft, in order to secure cryptocurrency exchanges need to be very conscious of the precautional steps to ensure the security of the trading platform.
Here are precautionary measures to assure the security of the cryptocurrency exchanges,
Cold Wallets Storage
Cryptocurrency exchange stores their resource on hot wallets for providing efficient trading for users. Wallets can be secured with multi-signature security, where in order to access the wallet need more than one key. The trading platform can store their cryptos in the cold wallet, which is not connected to the internet. It reduces the risks from hackers/theft.
The exchange can be split them as trading account and the main account.
The main account is where users store their cryptos as a liquid asset for easy deposit and withdrawal. Whereas trading accounts as liquidity pools for crypto transactions and trading. Cryptocurrencies cannot be withdrawn from the trading account as they are locked from withdrawing. Trading account cryptocurrencies can be stored in cold storage.
Two-Factor Authentication
Login passwords are playing important to log in to the account for transacting the cryptocurrencies. They are safe unless hewed by strangers. If the users lack to set a strong password or use the same password for multiple accounts they are prone to infringements.
Two-factor authentication provides additional support for user accounts added to the login passwords. Each and every time authenticated via google authentication for assuring the authenticated users in the crypto trading platform.
User IP Address associated with Registered account
The user IP address can be stored and unauthorized IP accessing the user account or withdrawing assets can be restricted with this feature. Users need to authenticate via login password as well as google authenticated code and device security features to access the trading platform from new IP addresses or devices.
Cryptocurrency exchange IP addresses cant restricted as they may use more than single IP for delivering exchange platforms for users on various geographical locations and based on the servers.
Push Notification via Email alerts for debit activity on the account
Alerts via Push notification play a vital role in intimating the users about their account activity. This is the best way to convey to the users about the account activity instantly on their withdrawal, deposit, & trading cryptos.
On the Email alerts if a user is not performing such account activity it can be annulled or the account can be suspended for a particular period to restrict the unusual activity.
Blocking Withdrawals in User recently updated Account information
User account details can be changed via 2FA, registered email address authentication. Whereas if someone tries to change all his account detail maybe lead to suspicious account activity. In order to restrict such suspicious activity, the withdrawal after updating the account details is restricted for a particular period of time.
Applying Insurance for Custodial Digital assets in the Exchange platform
User cryptocurrency stored on the exchange platform can be insured via a third-party insurance company. On the other hand, it can be done via internal policy or guidelines. Once stolen crypto assets need to be compensated to the user from the crypto exchange platform funds.
Tighten Security in the Crypto Exchanges
Cryptocurrency exchanges are vulnerable to online theft where trading platforms must be keen to ensure security features. Regularly auditing exchange access, user account activity, & ensuring the storage of user cryptos and platform digital assets on the cold wallet.
A trading platform must be developed by deploying strong security features that are more feasible to fight against illegal access. Must provide prior focus on the security features and deploy multi-layer security.
Wrapping Up
Above mentioned precautions are considerable while launching a cryptocurrency exchange. Cryptocurrency exchange involves the financial transactions held over the platform. Security features must be enhanced to deliver flawless trading to the end-Users.
If you are in the idea of starting a cryptocurrency exchange? then you are in the right place to build your cryptocurrency exchange with multi-layer security.
