How To Secure Your Cryptocurrency Exchange
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Think about how bitcoin has around for 12 years and how many other cryptocurrencies have been made in that time. Since hackers and con artists stole a lot of cryptocurrency from exchanges.
Even though the cryptocurrency exchange platform development industry keeps growing, bigger amounts of crypto need more accountability and much stronger security. Both white label and custom cryptocurrency exchanges are the same in this way. If security isn’t improve in the crypto space, people will be less likely to start using crypto. This will make crypto grow less quickly. Almost every day, we hear about a hack of a cryptocurrency exchange or a breach of sensitive data.
The hacker-attacked cryptocurrency exchange was never a better deal. They are becoming more and more common, and they hold a lot of money. Why wouldn’t someone want to find a security flaw in a cryptocurrency exchange in order to get rich quickly?
For now, just try to be a little more serious. Since the beginning of the internet, there have been people who do bad things on it. So, it makes sense that they are busy right now on the crypto market, where a lot of money is moving.
Let’s find out how the Secure Your Cryptocurrency Exchange maintained.
What if you want to start a Bitcoin exchange from scratch or are thinking about buying a “white label” Bitcoin exchange solution? Here are some tips for keeping your users’ money safe if you run a cryptocurrency exchange.
Here are eight ways to make sure a cryptocurrency exchange is safe.
In 2018, a hacker broke into the Japanese cryptocurrency exchange Coincheck and stole over $534 million worth of NEM coins that kept in a single “hot wallet” without multisignature security.
If Coincheck had used both hot and cold wallets, this wouldn’t have happened, at least not on such a large scale. If all of a customer’s assets are in hot wallets, their money could be at risk if the exchange system is hacked.
Even though the blockchain is a completely open system, attackers may be able to use on-chain analysis to keep track of which wallets used for hot storage and which are used for cold storage. To improve crypto security, a “white label” or custom bitcoin exchange may use pre-cold and pre-hot wallets.
Cold wallets should hold most of your cryptocurrency because they don’t connect directly to the internet.
Some exchanges, like KuCoin, have also made the user interface different for each asset. Coins can kept in both the Main Account and the Trading Account. Even though deposits and withdrawals made through the Main Account, you need to get your money in a more liquid form, like a hot wallet. The Trading Account set up as a pool of cash that can use to trade and buy and sell crypto. Since crypto assets can’t withdrawn until they are moved from the Trading Account to the Main Account, an exchange doesn’t to keep them in hot storage while they are in the Trading Account.
Two-factor Authentication for Secure Your Cryptocurrency Exchange
Two-factor authentication is a must in the crypto business because security is so important. Passwords stay the same until someone figures out what they are. A “password breach” happens when users don’t know how to make strong passwords or use the same password for many accounts. Hackers often use keylogging, which installs dangerous code on computers, because they have access to users’ login credentials. Once a hacker knows a password or gets it from someone else, he or she waits for the best time to use it.
Multi-factor authentication adds another layer of security on top of the password when you sign in or take money out. Two-factor authentication could be done with a text message or an email. A common way to use this service is with a mobile app like Google Authenticator or Authy, which makes a unique set of digits in a certain amount of time.
A certain IP address’s account
This security measure isn’t used as often as others, but an attacker might have a harder time using it. It is much harder to get into a crypto exchange Secure Your Cryptocurrency Exchange account that is linked to more than one or two IP addresses.
The main exchanges keep track of the IP addresses that users enter when they log in, but they only do this for informational purposes to see how the user has behaved in the past. But this done without giving the consumer a clear warning, and it is up to the consumer to notice any changes or strange things.
In the meantime, the first exchanges are starting to send users messages if they notice anything strange going on with their accounts, like access from a foreign country or a computer or browser that the user usually doesn’t let access the exchange.
When money taken out of the account, a message sent.
Another important security measure is to let the account holder know when money taken out of the account. In addition to telling you when you make a withdrawal, they also tell you when you make a deposit. All of this should make account holders more careful before something bad happens.
There’s a lot more to some exchanges than just sending an email to say you’re pulling out. You can also choose to click the “Active” button right in the email. If you do this, the transaction could be canceled or your account could even closed if strange or suspicious activity found on our account.
Withdrawals can’t make after account information changed
Hackers often change account information, such as email addresses and phone numbers. After getting into the account, the attacker must make sure that any withdrawals can approved by a phone or email that he controls.
By blocking withdrawals for many days or even a week or two after some account settings changed, crypto exchanges stop hackers from doing the bad things they usually do. If the hack is going to work, the person who hacked can’t know about it until the withdrawal confirmed.
There is a unit to stop fraud
The part of the company that works to stop fraud is very important. Having such a section is very helpful, especially for large companies and white label crypto exchanges, because it helps them avoid and spot any bad behavior. Everyone who works at the exchange should know how to spot fraud and stop it from happening. One of the most important things to do is to train your own staff.
Insurance cash for clients
There are usually two ways to make sure money stays on the exchange. The first one comes from an insurance company outside of the company, and the second one is based on an internal rule or policy. Because when assets lost or stolen, exchanges have to make up for the losses their clients have suffered. If they don’t, the company could have to close because of fines.
Security checks done on crypto exchanges.
Security checks done on a regular basis on cryptocurrency exchanges. They do two important things for the exchange operator, just like client insurance funds. A security audit may find security flaws in a “white label” or custom p2p crypto exchange development. It also gives investors more confidence and legal certainty. Audits are a big part of how many countries make sure they are following the rules. Money laundering and all kinds of fraud should limited so that people can have more faith.
There are different kinds of audits, but System and Organization Control audits are the most important for businesses. That deal with crypto exchanges. This is because they used to find possible trading risks and show customers. That your business has strong and effective security Secure Your Cryptocurrency Exchange measures in place.
Final Takeaway for Secure Your Cryptocurrency Exchange
The risks will always be bigger than the possible benefits. Everything could change if there was a cyberattack on the assets keep in bitcoin exchanges.
Think about how often hackers have broken into cryptocurrency exchanges in the past. Some of them are no longer around, like Mt.Gox, Cryptsy, Cryptopia, and BitGrail.
Hackers and con artists are always coming up with new tools. Methods to break into exchange servers and user apps. Starting a bitcoin business without a good cybersecurity plan. That is a big risk, because something unexpected will happen sooner or later.