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With the high growth in the cryptoactive market, institutional interest in cryptocurrencies arises, many companies are considering allocations to Bitcoin and other digital assets, such as NFT’s. Faced with this new scenario, there is a new need: to protect cryptocurrency, as well as private keys.
To help you with this, here are 10 practices to keep your assets safe.
1 – Do not self-custody private keys
The alphanumeric code that serves as the access key for digital wallets should not be in the custody of just one person. If opting for a managed service, make sure the company uses appropriate security firewalls.
Remember that if you lose access, you will probably lose it forever, recovery cases are rare.
2 – Use more than one digital wallet
Spread your assets across more than one digital wallet, so in the event of a hack or breach, you won’t lose access to everything.
3 – Use cold and hot wallets to protect cryptocurrency
If you are not using the assets for trading, see the possibility of storing them offline, in a cold wallet, keeping online, in a hot wallet, only the assets that are being traded. This way it will be easier to protect the assets.
4 – Implement security policies to reduce risks
The greater the amount of cryptocurrencies, the greater the risk, so to handle large amounts, basic risk management procedures must be established.
5 – Hire specialized providers to help protect your cryptocurrency
Companies that offer asset custody services are equipped to help protect your assets. They must meet regulatory custody requirements, providing reliability, accounting and auditing, regardless of the type and quantity of their assets.
6 – Conduct your due diligence safely
Understand the security environment your digital assets are in, whether in-house or outsourced.
7 – Check if your suppliers provide indemnification
Check the clauses of the contracts with the suppliers. Indemnity clauses must be incorporated into contracts, providing for errors, omissions, failure to perform or negligence.
8 – Regulations that apply to you and your suppliers
Having possession of digital assets, you need to ask yourself about the regulations and which ones apply to your situation.
9 – Ensuring appropriate governance
Companies dealing directly with cryptocurrencies must involve managers and directors in risk management. In this way, appropriate ongoing supervision is ensured.
10 – Consult a specialized insurance broker to protect your cryptocurrency
An insurance broker specializing in technology and financial services can point out unidentified risks.
It is important to note that transactions performed on blockchains are carried out without intermediaries, that is, there is no person who captures, confirms or accounts for the transaction.
Therefore, there are no resources for owners to recover their assets once they have changed hands. Hence the importance of building a highly secure and resilient infrastructure.