As more people turn to crypto exchanges, the security of these trading platforms is an issue of growing concern. At the largest crypto exchanges, there are usually tens of millions of dollars flowing through digital assets at any time. The immutable nature of blockchain transactions makes crypto exchanges a prime target for cybercriminals. Companies like Hacken are introducing solutions that focus on cybersecurity standards, in order to help exchanges scale into new horizons.
The CERtified Security Standard Boosts Security at Crypto Exchanges
To boost the security at crypto exchanges, Hacken, which is a leading cybersecurity company, came up with CERtified and the CER.live platform. Both of these solutions are certification standards for the cybersecurity world.
First of Its Kind in the Crypto World
Crypto exchanges have become a prime target for hackers in the recent past. One of the most famous examples is the hack of the Mt Gox exchange. Crypto exchanges are vulnerable to some of the same threats faced by the fiat-banking world. Besides that, they face additional problems due to inadequate implementations of the blockchain.
Hacken was the first company to launch cybersecurity standards for crypto exchanges globally. The platform launched the Crypto Exchange Ranks (CER.live) in 2018. CER.live and the CERtified certification are designed to educate users. It is also designed to help users avoid crypto exchanges that do not offer adequate security measures in place to safeguard user funds.
The CERtified Certification
CERtified certification is used to provide certification to an exchange. After analysis is performed, a crypto exchange can be labeled as uncertified, or it can be labeled as a 3-star exchange. A 3-star certified exchange means it operates the highest security standards. The certification is based on:
- User security
- Server security
- Crowdsourced security
- Historical hack cases
To ensure that an exchange meets the highest standards, penetration tests are conducted. The tests check where hackers can gain access to the platform and such loopholes that exist at a given time. These tests need to be performed often since exchanges are constantly adding new features to their platforms. Penetration tests have helped various exchanges make critical changes to their interfaces.
Insolvency at a crypto exchange can lead to huge losses for investors and traders. As a result, an exchange’s wallet addresses should be disclosed to users to prove they have funds. CERtified looks at exchange insolvency risk and comes up with objective rankings. No investor wants to be affiliated with an exchange that has high insolvency risk. In doing so, the user runs the risk of parking their assets at exchanges that could be in deep trouble if/when market turmoil rears its ugly head.
Besides the four mentioned above, CERtified certification also checks the Bug Bounty program of an exchange that is run by crowdsourced or external security firms. Bug bounty program helps detect any flaws in the platform that the developers might have missed. Once a crypto exchange meets all the standards, it will receive certification.
Over 50 Crypto Exchanges Use CERtified Standards
The CERtified Standards are already in use at over 50 crypto exchanges. These exchanges’ rankings can be found at the CER.live platform. In the announcement, Hacken also revealed that CoinGecko was updating its Trust Score algorithm to account for CER.live Certification. It is expected that the number of exchanges using CERtified standards will grow in the future.
Improving security at crypto exchanges is crucial to the success of the global crypto sector. In the digital economy of the future, trust is one of the most valuable assets. Companies like Hacken are closing the gaps and helping these exchanges build additional trust. As the digital asset markets continues to grow in adoption, crypto exchanges are doing everything in their power to retain assets. Until the market further matures, alternatives such as “cold storage” will be a powerful option for investors. With the various inefficiencies behind “cold wallets” , the opportunity for exchanges is still of epic proportion, as long as they can tighten up security protocols.