Crypto exchanges are becoming a mainstream part of the online world, used by millions every week to buy, sell, and store cryptocurrency. But unfortunately, there are still security weaknesses at many exchanges, which could be addressed with proper crypto exchange development.
So, what are some of these weaknesses? And how can exchanges and users go about reducing them and making the world of crypto that much safer?
Vulnerable Hot Wallets
Hot wallets, which are crypto wallets connected to the internet, are used at many crypto exchanges, typically by those without significant knowledge of crypto security. Hot wallets regularly use single private keys, and anyone getting access to a single private key can hack the hot wallet easily. This has already happened several times.
Proper crypto exchange development will ensure that multisignature private keys are used to mitigate against this risk. It is also important that there’s proper integration with cold wallets.
Weakness to Phishing Scams
Cryptocurrency exchanges have fallen victim to phishing scams in the past. Attacks of this type use deception, such as pretending to be an exchange employee via an email, in order to receive sensitive details. Phishing can also lead to malicious files being installed on the victim’s device. Both outcomes can lead to crypto being stolen.
Increased education on the part of the exchange is key to preventing phishing, but developers can also ensure that specific code is used within real emails, allowing recipients to easily identify them as genuine.
Exchange Code Vulnerabilities
Professionals have found a remarkable number of code mistakes online. Code mistakes can compromise platform security, and they’re actively looked for by those looking to hack crypto exchanges. The only way to protect against code vulnerabilities is simple: employ a competent and well-respected company for crypto exchange development.
But even if the exchange’s code is perfect, there can still be vulnerabilities in the code of third-party software. Unfortunately, this can’t be eliminated by developers of an exchange, but greater education of employees and users will help.
How Can Users Mitigate Against Exchange Vulnerabilities?
In the end, it’s users who pay the price for the vulnerabilities of crypto exchanges. Ways in which users can protect themselves include:
But it should also be remembered that, while there are vulnerabilities, crypto crime is much less prevalent than crime committed against traditional bank accounts. With a little caution, crypto users can protect themselves from most criminals looking to steal their funds.
Contact KUNA Tech for Effective Crypto Exchange Development
KUNA Tech has the tools and experience needed to effectively develop safe and secure crypto exchanges. We’ve run our own cryptocurrency exchange since 2014, so have first-hand experience in implementing the effective safety measures needed to protect users.