Bitcoin Exchange Software: A Safety Measure checklist

Cryptocurrency exchange trading platforms are online platforms where users buy, sell or trade cryptocurrencies like bitcoins, ether, litecoins, and more. Privacy and security are the two main characteristics that should be ensured by every exchange platform.

The recent hacks and scams in the cryptocurrency exchange platforms made the traders dubious about the crypto market. The amount of crypto assets being hacked got multiplied by 13 times in the current time, according to a report by Coindesk. All these incidents lead to an indispensable need for multi-layer security to mitigate security risks associated with an exchange.

The security features can be categorized into three main fronts that are:

• On the technology
• On the headers and related
• On the exchange

On the Technology/Code front:

While getting your Bitcoin exchange software developed, make sure that you not only focus on the technology but also integrate the right security features in your exchange. Make sure to get your exchange developed by an experienced company that promises to provide these features.

• Https- Make use of Https. It allows secured transfer of information between server pages to the clients system.

• Hashing- The passwords which are stored in the exchange should be hashed by using an effective hashing technique.

• Logging out of session- This is the security feature which most companies do not pay heed to. It should be ensured that after every logout the session the identifier is destroyed.

• Time the entire session management- There has to be a defined monitor in-activity and timeout session. If in case multiple sessions are detected, all active sessions should be destroyed. And in case of resetting the passwords, again all active sessions should be destroyed. Companies should not take this measure lightly as it may create a roadblock in the future.

• State Parameter in OAuth2- While working on Bitcoin Exchange Script, it is important to use State parameter in the OAuth2 efficiently. Typically, the redirection URL is put in the Redirect_URI parameter. However, it can lead to a security vulnerability which makes it easier for a hacker to promptly insert arbitrary strings. Thus, responses are intercepted, and unwanted commands are executed by the hackers.

• No open redirects- There shouldn’t be any open redirect that is performed within a system after successful user login. The login and signup inputs should be parsed properly and sanitized for data://, javascript://, CRLF characters. 
• Cookies Management- Cookies management and cookies processing is vital when it comes to a Bitcoin Exchange development, make sure to always set secure and http cookies only.

• JSON web tokens- Make sure to use JSON web tokens for representing the claims between the 2 parties where ever possible.

• OTP (One Time Password) – OTP is a secure method but is not separated from the loopholes. Modules should be build that will track the attempts of the particular user.

• Pattern for resetting password- In Bitcoin exchange software the expiration of the tokens should be restricted to a strict limit. Random effect in the resetting of password has to be generated via email.

• SMS verification- The personal contact information of users such as email, mobile number and address must be carried out through SMS verification. Unless this is done so, hackers may use social engineering hacking tools for getting past the security checks.

• KYC compliant- Whilst carrying out KYC document uploads, it is important to consider the methods that you put in place for uploading such files. The files and file types should be passed through a mime check for patterns. It is better to keep the files temporarily within an external platform instead of inside the server as this can prevent hackers from getting inside the cryptocurrency exchange server.

On the Headers and related configurations:

• CSFR headers- Implementing CSFR headers can help in preventing cross site forgery attacks.Making use of http Strict Transport Security practice through the exchange can help to prevent strip attacks.

• Content security policy headers- Making use of Content Security Policy headers prevents data injection attacks and cross site scripting.

• X Frame and X-XSS securing- By making use of X Frame as well as X-XSS securing, your site can be protected from the cross attacking.

• Domain name system- Hackers typically use different phishing methods to trick the users from original site. Therefore you need to keep the Domain Name System records updated in order to add a Sender Policy Framework.

On the Exchange front:

• Multi Signature- There has to be a practice of employing two or more signatures to validate a particular transaction. In a single private key, there are many limitations attached such as loosing, death of the holder or any security attack.

• Time-locked transactions- This is one of the techniques mostly used by the hackers – it was seen in the Coincheck exchange when the hackers drew alt-coins in a serial manner from the various users account. The time lock technique enables the execution of transactions on a specific time and at various steps. If any mismatch happens, the transaction would be immediately rolled back making it impossible for hackers to withdraw Bitcoins.
• Cold Wallet-Hot Wallet Integration- This is one of the major steps which acts as a security for the traders. Traders should have access to both of the wallets, i.e. hot and cold wallet. Cold wallet is the offline wallet wherein most of the crypto assets are kept by the traders. As it is unplugged from the servers therefore it is not possible for hackers to hack them. Therefore, having both of the wallets acts as a source of security and the liquidity for the investors.

• 2 Factor Authentication (2FA)- This is the most certain feature for the security in the checklist of any Bitcoin exchange software.

• Cloud Flare- You should secure your cryptocurrency exchange and API from all possibilities of online cyber attacks such as DDOS by making use of Cloud Flare.

• HSM- Using Hardware Security Modules or HSM is always a good idea for protecting server blades. In many cases, they can also remove all security keys to prevent breaches that have already happened.

Conclusion

Therefore, it is advisable for the businesses or entrepreneurs who are exploring the opportunities to get their cryptocurrency exchange developed, to look for all of the security features to be integrated in the exchange. You can hire our experienced experts who have deeply engrossed themselves for making security a first feature for the exchanges.