Basically, cryptocurrency exchanges are decentralized in nature. Nowadays, cryptocurrencies are big targets by anonymous hackers and online scammers. Crypto exchange has large sums of money. So most of the cyber attackers target to steal digital currencies. Even though most of the popular crypto exchanges got hacked by the cyber attackers. Such as binance, bitstamp, bitfinex, Mt.Gox, and more. As for now, about 54% of crypto exchange websites have security holes. Moreover, $1.7 billion worth of cryptocurrencies has been stolen from the crypto exchanges by anonymous hackers.
Currently, there is a vast buzz prevailing for starting a secured cryptocurrency exchange. You might have planned to start your crypto exchange with a stunning UI/UX feature to grab audience attraction. But there are some essential security features that are more important for a secured bitcoin exchange software.
As the modern world is witnessing rapid growth in advanced technologies. Through this rapid growth, it has some good causes. but on the other hand, it is more favorable for malicious activities. To overcome the prey of cyber attacks and scams. Here are some essential security features that will safeguard your cryptocurrency exchange from any threats.
Powerful security features that you should have on your cryptocurrency exchange
Only the implementation of strong security features in crypto trading platforms can avoid security holes and other fraudulent activities. Now let us see those essential security features for your crypto exchange.
Registry Lock is commonly used as an additional security layer to the cryptocurrency exchange. It helps to lock the domain name in the registry level. So it enables the domain name owner to lock down the domain information. It blocks the name of various operations. Such as content modification, DNS server modification, domain transfer, and domain name deletion. It protects your exchange by blocking unauthorized changes or illicitly deleting the essential elements of your domain. Also, these features do not allow any anonymous hackers to check or modify the registration details.
On a recent ICO rating survey, we can see that only 2% of crypto exchange platforms implemented registry lock as a security system. If you incorporate the registry lock in your exchange. when you request to modify the domain name then it asks for a three-way passphrase check. This three-way check is completely performed between the domain registrant (you), the registrar (your service provider), and the registry.
So by using this mechanism registry lock provides top-notch security to your crypto exchange. Also, it provides a high-level of domain security.
Two-factor Authentication (2FA)
Two-factor Authentication is mostly enabled in all digital-based platforms. This feature acts as a secondary security system in most of the crypto trading platforms. Even social media applications, Gmail, and more platforms use this feature for high-level security. In cryptocurrency exchange, it has two-layer of security. Only after entering two verification passwords, you can access the credentials or transactions.
For password verification, it includes a pin code, mobile number, OTP, Gmail verification code, or fingerprint. You can customize your own password as per your wish in the cryptocurrency exchange platform. 2FA not only provides security to your user transactions. It also provides additional security for user exchange account in the trading platform. So by integrating this security feature in your cryptocurrency exchange. Then there will be no chance of cyber attacks and third party appearance. This feature gives better security to your credentials and crypto transactions.
Integration of cold wallet
A Crypto wallet allows the user to send, receive, and transfer digital currencies securely. This feature plays a vital role in crypto trading platforms. Because without this feature, they can not deposit or withdraw their funds. It also monitors the user’s crypto balance and transaction history. Here public keys and private keys are completely used for secure crypto transactions. There are two kinds of storage type in the crypto wallet. Such as hot and cold wallets.
Hot wallets allow the user to transact cryptos only through the internet. So all the user funds are completely stored online. Hot wallets are online-based storage. This makes cyber attackers steal crypto from their wallets. But cold wallets are offline storage and the user can access and monitor crypto balance without the internet. Here users can hold cryptocurrencies and tokens in offline storage. Incorporating the cold wallet in cryptocurrency exchange provides additional security to user’s funds. Even Though your exchange is attacked by hackers, crypto assets stored in cold wallets can not be stolen by hackers.
Cold wallets are also enabled with the biometric authentication and multi-signature authentication for high-end security.
It is a commonly used security feature for most of the platforms. Such as bank transfer, Paytm transfer, app lock, and more. This security feature helps your cryptocurrency exchange to have an authentic login. Also, it will prohibit unnecessary logins which will be highly vulnerable. Only the crypto exchange owner of the exchange can log in to the exchange platform using the biometric system. It reduces your time of logging rather than entering a pin or password.
Nowadays, biometric authentication has advanced to have eye recognition. So you can also have a face lock in your mobile trading application.
This feature provides the security to your crypto exchange platform vaults. If the user has to transact any crypto or token from the wallet. Then it requires multiple security keys to perform the transaction. Without a key, you can not withdraw funds from the wallet. Also, for each transaction and withdrawal, it generates the new alternative security key.
So by using this security feature in your crypto exchange, there will be no way of cryptocurrency theft in the wallet.
Web protocol security
Web protocols are more vulnerable to cyber-attacks. You must check whether you have the following headers in your web protocol. Also, only 29% of crypto exchanges don’t have this feature.
HTTP Strict Transport Security(HSTS)
This header clarifies whether all the browsing term has HTTP protocols.
- X-frame options
This option protects your reliable content from being embedded with other websites. It protects your cryptocurrency exchange by avoiding clickjacking attacks.
- X-XXX protection
It prevents your exchange platform against cross-site scripting attacks.
- Content security policy (CSP)
It determines which dynamic resources are permitted to load. Also, it avoids XSS attack risks.
Data in the blockchain network is completely encrypted using unique algorithms. When you integrated this feature, then it will be very hard for hackers to decrypt the data from a blockchain. During the time of the transaction, the data will be entirely stored in the form of a Private key, Public key, and digital signature. There will be no name and other details stored in the distributive ledger.
This type of secured transaction can only be done through a peer to peer cryptocurrency exchange. So every transaction is done between a user to a user using blockchain technology. This security feature would be very useful if you are going to start a decentralized crypto exchange.
Domain Name System Security Extension (DNSSE)
This feature is mostly used to authenticate all the domain name system queries. In other words, we can say that It is the combination of both public keys and digital signature to validate the data. It can restrict the unauthorized DNS entries. It avoids dis-honorable websites and being affected by malicious activities. Such as cache poisoning and pharming. But currently, only 10% of crypto exchanges use this security feature. The only drawback is, DNSSE can not provide protection to cryptocurrency exchange from DDoS attacks.
Anti-DDoS stands for Anti Distributed Denial of Service. Nowadays, DDoS attacks are more common in crypto exchanges. DDoS makes the exchange services temporarily unavailable to the users. This Anti-DDoS feature came into the market to overcome these attacks. It acts as a tool for detecting the target server or network from the DDoS attacks. Also, you can protect your crypto exchange from a vast amount of user traffic from various sources.
Typically, many crypto exchanges have been victims of DDoS attacks and made heavy losses. To prevent these DDoS attacks, we should enhance the crypto exchange firewall to drop incoming ICMP packets and block DNS responses from other networks. You can incorporate the anti-DDOS module in your cryptocurrency exchange for additional security.
End to end encrypted transaction
This feature provides a secure transaction between purchasers and sellers. Whenever the user processes the transaction, from the start to the end it is fully encrypted. So most of the crypto traders, buyers, and sellers prefer this security feature for the transaction.
This feature is also used for message transactions in the crypto exchange. By using this security feature, you can avoid fraudulent activities. Also, you can avoid the middlemen or intermediate during the time of the transaction.
As a crypto exchange owner, you need to make your crypto exchange secure by integrating these security features. These features will grab the attention of many crypto users across the world. Make your crypto exchange to rank among the top 10 by integrating these powerful security features. Coinsclone is here to accomplish your business goals. If you are planning to build a secured crypto exchange, then buy our trustable bitcoin exchange software. Which helps you to launch your trading platform within a few days. Our software comes with all top-notch security systems. This makes your crypto exchange more secure and protects from cyber-attacks, internet scammers, and other fraudulent activities.
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