Cryptocurrency Transactions Security

Encoding vs Encryption vs Tokenization. . . Encoding, encryption, and tokenization are three distinct processes that handle data in different ways for various purposes, including data transmission, security, and compliance. In system designs, we need to select the right approach for handling sensitive information. 🔹 Encoding Encoding converts data into a different format using a scheme that can be easily reversed. Examples include Base64 encoding, which encodes binary data into ASCII characters, making it easier to transmit data over media that are designed to deal with textual data. Encoding is not meant for securing data. The encoded data can be easily decoded using the same scheme without the need for a key. 🔹 Encryption Encryption involves complex algorithms that use keys for transforming data. Encryption can be symmetric (using the same key for encryption and decryption) or asymmetric (using a public key for encryption and a private key for decryption). Encryption is designed to protect data confidentiality by transforming readable data (plaintext) into an unreadable format (ciphertext) using an algorithm and a secret key. Only those with the correct key can decrypt and access the original data. 🔹 Tokenization Tokenization is the process of substituting sensitive data with non-sensitive placeholders called tokens. The mapping between the original data and the token is stored securely in a token vault. These tokens can be used in various systems and processes without exposing the original data, reducing the risk of data breaches. Tokenization is often used for protecting credit card information, personal identification numbers, and other sensitive data. Tokenization is highly secure, as the tokens do not contain any part of the original data and thus cannot be reverse-engineered to reveal the original data. It is particularly useful for compliance with regulations like PCI DSS. – Subscribe to our weekly newsletter to get a Free System Design PDF (158 pages): https://bit.ly/3KCnWXq #systemdesign #coding #interviewtips .

REST API Authentication: Securing Your Data in the Modern Web In today's interconnected world, REST APIs form the backbone of countless applications and services. But with great power comes great responsibility - especially when it comes to security. Let's dive deep into four crucial authentication methods for REST APIs: 1. Basic Authentication:    • The simplest form, sending base64-encoded username and password with each request.    • Pros: Easy to implement, widely supported.    • Cons: Credentials sent with every call, vulnerable if not used with HTTPS.    • Best for: Internal APIs or dev environments, not recommended for production. 2. Token Authentication:    • Uses temporary tokens instead of credentials for each request.    • Workflow: Client authenticates once, receives a token, uses it for subsequent requests.    • Pros: More secure than Basic Auth, tokens can be revoked, reduced load on server.    • Cons: Requires token management, potential security risks if tokens are compromised.    • Best for: Most web and mobile applications, Single Page Applications (SPAs). 3. OAuth Authentication:    • Allows third-party applications to access resources without sharing passwords.    • Complex workflow involving multiple steps: request, grant, access token, refresh token.    • Pros: Highly secure, great for third-party integrations, fine-grained access control.    • Cons: Complex to implement, overkill for simple APIs.    • Best for: APIs that need to integrate with multiple services or allow third-party access. 4. API Key Authentication:    • Uses a unique key to identify and authenticate API requests.    • Simple workflow: Client includes the API key in headers or query parameters.    • Pros: Easy to implement and use, good for tracking API usage.    • Cons: Less secure if keys are exposed, limited in terms of access control.    • Best for: Public APIs, developer-focused services, or when you need to track API usage. Choosing the right authentication method depends on your specific use case, security requirements, and target audience. Many modern applications use a combination of these methods for different scenarios. Key Takeaways: • Always use HTTPS to encrypt data in transit, regardless of the auth method. • Consider the trade-offs between security and ease of use. • Implement proper token/key management and rotation policies. • Stay updated on security best practices and emerging standards. What authentication methods are you using in your projects? Have you faced any challenges implementing them?

Last month, India’s biggest crypto exchange CoinDCX lost ₹368–378 crore. Not because of a customer hack. But because an internal wallet got compromised. Here’s how it played out 👇 → Attacker hijacked a liquidity wallet → Bridged funds (Solana ↔ Ethereum) → Laundered via Tornado Cash Customer wallets? ✅ Safe. But the breach? ❌ Server-side, deep inside their own infra. Most teams think “cold storage = safe.” Reality check: internal wallets are the real blind spot. Here’s what 99% of teams don’t do when it comes to high-risk wallets,  automation accounts, and liquidity ops. So here’s a 6-point Internal Wallet Risk Audit you can run this week: 𝟭. 𝗪𝗮𝗹𝗹𝗲𝘁 𝗥𝗼𝗹𝗲 𝗠𝗮𝗽𝗽𝗶𝗻𝗴 List every wallet → check what it should do vs what it can do. ⚠️ Red flag: liquidity wallet can move treasury funds. 𝟮. 𝗧𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗟𝗶𝗺𝗶𝘁𝘀 + 𝗩𝗲𝗹𝗼𝗰𝗶𝘁𝘆 Can the wallet push $10M at once? Or 10x in 2 min? ⚠️ Red flag: no daily caps or auto-delays. 𝟯. 𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 & 𝗦𝗶𝗴𝗻𝗶𝗻𝗴 𝗪𝗼𝗿𝗸𝗳𝗹𝗼𝘄𝘀 Who signs off on big moves? Forced multi-sigs? JIT approvals? ⚠️ Red flag: backend automation with always-on keys. 𝟰. 𝗕𝗿𝗶𝗱𝗴𝗲 𝗕𝗲𝗵𝗮𝘃𝗶𝗼𝗿 𝗪𝗮𝘁𝗰𝗵 Monitor transfers across chains. Auto-pause weird routes/off-hours. ⚠️ Red flag: first-time bridge + big amount + midnight = no alert. 𝟱. 𝗞𝗲𝘆 𝗥𝗼𝘁𝗮𝘁𝗶𝗼𝗻 𝗗𝗶𝘀𝗰𝗶𝗽𝗹𝗶𝗻𝗲 How often do you rotate keys? Retire old ones? ⚠️ Red flag: stale keys from 2022 still active. 𝟲. 𝗥𝗲𝗱 𝗧𝗲𝗮𝗺𝗶𝗻𝗴 ‘𝗥𝗼𝗴𝘂𝗲 𝗪𝗮𝗹𝗹𝗲𝘁𝘀’ When did you last simulate a compromised wallet? ⚠️ Red flag: confident → but never tested. Know friends or colleagues trading crypto?  ♻️ Re-share this with them, they should know where the real risks are. This wasn’t a crypto-specific failure. It was a visibility, privilege, and control failure. What are your thoughts on the CoinDCX breach? #CyberSecurity #CryptoSecurity #BlockchainSecurity #CryptoNews #DataBreach #HackPrevention #Web3Security #CloudSecurity #InfoSec #CryptoHack #CoinDCX #SecurityAwareness #FinTech #RiskManagement #SecurityTips #HackingNews

👏 Cryptography management and cryptoagility closer to become regulation after the three European Supervisory Authorities (European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA) and European Securities and Markets Authority (ESMA) – the ESAs) published today the first set of final draft Regulatory Technical Standards (RTS) under the DORA. (Find the relevant links at the end) DORA is the Digital Operational Resilience Act for the financial sector with rules for the protection, detection, containment, recovery and repair capabilities against IT incidents. The draft RTS on ICT risk management framework covers encryption and cryptography in section IV (page 49). I would like to highlight Article 6, point 4: "Financial entities shall include in the policy on encryption and cryptographic controls provisions to, where necessary, on the basis of developments in cryptanalysis, update or change the cryptographic technology to ensure they remain resilient against cyber threats [...]. Where the financial entity cannot update or change the cryptographic technology, it shall adopt mitigation and monitoring measures to ensure they remain resilient against cyber threats." These final draft technical standards have been submitted to the European Commission, who will now start working on their review with the objective to adopt these first standards in the coming months. So, proper cryptograhy management and cryptoagility will soon be part of the regulatory compliance obligations of financial entities in Europe. Links: 🚩 Announcement of the publication of the final drafts: https://lnkd.in/dnzDP9PG 🚩 Final report on draft RTS on ICT Risk Management Framework and on simplified ICT Risk Management Framework: https://lnkd.in/dp2aUj75 🚩 DORA: https://lnkd.in/dtJguGHf Thanks to Nuria González Martín for her continued monitoring of the regulatory space. #pqc #cybersecurity #cryptography

ASD and partners have released a guide to "Managing cryptographic keys and secrets", and given the current wave of infostealer-originated compromises, it's well worth a read. Key takeaways (pardon the pun) are: 🔑 Your organization needs a Key Management Plan (KMP) that articulates the threats to cyrptographic material as well as mitigation and response strategies 🔑 Key generation is best achieved using Hardware Security Modules (HSMs) - as famous computer scientist Donald Knuth said in "random numbers should not be generated with a method chosen at random" 🔑 Keys need to be stored with least privilege (separation of duties) and strong access controls, and distributed securely 🔑 Deploy effective logging and monitoring, and conduct audits 🔑 Plan for key rollovers and destruction, with keys having defined maximum usage periods 🔑 Prepare for transition to quantum-resistant algorithms There is a lot more detail in the guide, including links to the relevant standards. This is a good starting point for developing a policy and KMP for your organization, especially if you need to comply with ISM or FIPS. What the guide does not cover is practical implementation advice, such as how to automate trusted key management processes - SPIFFE (Secure Production Identity Framework For Everyone) is perhaps better suited for more technical practitioners. 📘 "Managing cryptographic keys and secrets": https://lnkd.in/gwvGQ5ep 📘 [Mentioned] SPIFFE: https://lnkd.in/g9bGHTP2

Headline: China Unveils Quantum-Resistant Blockchain Breakthrough: EQAS Technology Emerges ⸻ Introduction: As quantum computing edges closer to practical implementation, the cryptographic foundations of blockchain technology face growing threats. In response, a team of Chinese researchers has developed a pioneering blockchain system designed to withstand quantum attacks. Known as EQAS, this new architecture could preserve the integrity of blockchain in a post-quantum world. ⸻ Key Details and Technical Highlights: 1. The Quantum Threat to Blockchain • Traditional blockchain systems rely on mathematics-based encryption algorithms (e.g., RSA, ECC) for verifying transactions and ensuring data security. • Quantum computers, once fully operational, could crack these algorithms in seconds, undermining trust in blockchain applications like financial transactions, digital identity, and logistics. 2. The Chinese Research Response: EQAS • EQAS stands for Efficient Quantum-Resistant Asymmetric Signature system. • Developed by a research coalition from: • University of Science and Technology Beijing • Beijing Institute of Technology • Guilin University of Electronic Technology • Led by Associate Professor Wu Tong, the team designed EQAS as a next-generation digital signature tool that doesn’t rely on vulnerable cryptographic math. 3. How EQAS Works • Instead of standard encryption schemes, EQAS utilizes a novel signature mechanism resistant to quantum decryption techniques. • EQAS improves both security and efficiency, making it suitable for deployment across existing blockchain frameworks. • The researchers claim EQAS offers real-time verification with minimal computational overhead, key for high-speed transactions and decentralized networks. 4. Strategic Significance for China and Beyond • EQAS aligns with China’s broader push into quantum-safe infrastructure and data sovereignty. • The development positions China as a global leader in post-quantum blockchain innovation, anticipating future digital finance and government applications. ⸻ Why This Matters: With quantum computing poised to render conventional cryptography obsolete, EQAS represents a critical safeguard for the future of blockchain. This advance not only protects sensitive digital assets but also ensures long-term trust in decentralized technologies. As countries race to develop quantum-resilient infrastructure, China’s EQAS initiative may become a blueprint for secure, post-quantum digital ecosystems worldwide. https://lnkd.in/gEmHdXZy

99% of users risk their crypto to hacks due to poor wallet hygiene. Here are 7 essential tools everyone needs to secure their wallets: 1. Create a secure multi-sig wallet with Safe Use it for the crypto that you are holding in the long term. It acts as a secure banking vault requiring several wallets (private keys) to authorize any transaction. So even if one of the wallets gets compromised, your funds are still safe. 2. Get a cold wallet like Ledger or Trezor Hot wallets like Metamask that are always connected to the internet are much riskier. Get a cold wallet that's not connected to the Internet and use it as a secure storage for your assets. It can also act as one of the wallets for your multi-sig. 3. Delegate authority of your multi-sig or cold wallet with Delegate (.xyz) NEVER use your secure multi-sig or cold wallet to interact with suspicious protocols. Always use a new risky wallet for that. And delegate the authority of your safe multi-sig/cold wallet to this risky wallet in case you need to claim an airdrop or mint an NFT. 4. Remove unlimited token spend approvals with Revoke (.cash) Many DeFi protocols ask for unlimited token spend approvals. So if the protocol gets compromised, your wallet can be drained. Review and remove any unnecessary approvals granted in the past. 5. Use a portfolio tracker like DeBank or CoinStats to monitor your DeFi positions Track all your on chain activity in DeFi in one place. Spot any suspicious or unusual on-chain activity early on and take action. 6. Use Wallet Guard to preview your transactions Preview all transactions and understand what exactly you are approving. 7. Exercise caution and NEVER do any of the following: - Download any suspicious files sent on Telegram/social media DMs - Click on any Airdrop announcement/crypto winning emails - Use weak and easy-to-guess passwords Use these tools and best practices to secure your crypto wallets against hacks and phishing scams. Image via Designrush P.S. Any other good tool that I missed? Let me know below. Follow 👉 Aram Mughalyan & share ♻️ this post if you like it.

💡 What Banks are Looking for ? Innovation Banking ! Card tokenisation is a way of enhancing the security and privacy of card transactions, as it lowers the threat of data breaches and fraud. The Reserve Bank of India (RBI) has published guidelines for card tokenisation in India Card tokenization is indeed a powerful security measure designed to safeguard sensitive data during online transactions. By replacing the Primary Account Number (PAN) with a unique token, the actual cardholder data is protected. It will be interesting Innovation - Integrating AI (Artificial Intelligence) and Blockchain with tokenization can further enhance security and provide additional layers of protection. Let's understand - How Tokenization Process Works ? - Generation of Tokens: When a user initiates a transaction, the original PAN is replaced with a unique token. This token is a randomly generated string that serves as a surrogate for the actual card data. - Token Storage: The token, rather than the PAN, is stored in the merchant's or payment processor's system. Even if the database is compromised, the stolen tokens are meaningless without the corresponding decryption key. - Secure Transmission: During the transaction, only the token is transmitted, ensuring that the actual cardholder data is not exposed to potential threats. Can we strengthen this Process to avoid any more Regulations Oe controls in future with AI and Blockchain ? 1. Let's look at Integration with AI: - Fraud Detection: To Analyze transaction patterns and detect anomalies that might indicate fraudulent activity.  - Real-time Risk Assessment: To Provide real-time risk assessments during transactions, evaluating multiple factors to determine the likelihood of fraudulent behavior. 2. Let's look at Integration with Blockchain: - Decentralized and Immutable Ledger: Blockchain technology can create a decentralized and tamper-resistant ledger for storing transaction data.   - Smart Contracts: Ensures that payments are processed only when specific conditions are met, reducing the risk of unauthorized or fraudulent transactions. - Enhanced Transparency: All authorized parties to access a consistent version of the transaction ledger. 🚀 Bottomline - The combination of tokenization, AI, and Blockchain provides robust protection against data breaches and unauthorized access and contribute to advanced fraud prevention measures. Blockchain enhances the efficiency of the payment process while maintaining transparency and accountability. The integration of AI and Blockchain with card tokenization creates a comprehensive security framework for online transactions. Such Approach can protects sensitive data but also addresses evolving cybersecurity challenges in the dynamic landscape of digital payments.

🚨 𝗖𝗿𝘆𝗽𝘁𝗼 𝗙𝗿𝗮𝘂𝗱 𝗔𝗹𝗲𝗿𝘁 𝗳𝗼𝗿 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 🚨 Recently, Sifted shared a story about VCs being catfished by a supposed Family Office - Gloucester Circus. Time, effort, and expense wasted and lost. For founders, particularly 𝘶𝘯𝘥𝘦𝘳𝘦𝘴𝘵𝘪𝘮𝘢𝘵𝘦𝘥 𝘧𝘰𝘶𝘯𝘥𝘦𝘳𝘴®, raising funds is challenging enough without falling victim to scams. Unfortunately, one of my clients recently experienced a quite frankly, horrible incident during their fundraising journey. 𝗧𝗵𝗲 𝗿𝗶𝘀𝗸𝘀 𝗲𝗻𝘁𝗿𝗲𝗽𝗿𝗲𝗻𝗲𝘂𝗿𝘀 𝗳𝗮𝗰𝗲 𝗶𝗻 𝗮𝗻 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗶𝗻𝗴𝗹𝘆 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝘄𝗼𝗿𝗹𝗱 𝗶𝘀 𝗺𝗶𝗻𝗱 𝗯𝗼𝗴𝗴𝗹𝗶𝗻𝗴, 𝗮𝗻𝗱 𝘀𝗰𝗮𝗿𝘆. Here’s what happened: My client was introduced to a family office via a placing agent promising funding. My client did due diligence on the family office and it appeared to check out. The agent requested proof of a specific account balance in cryptocurrency, which seemed legitimate during their due diligence. She converted cash to crypto, attended a Zoom call, and showed the balance in her wallet via screen share during a call with the agent and family office. What happened next is shocking. Before her eyes, the wallet was emptied. The agent, and supposed family office wallet were all part of an elaborate scam. 💡 Here’s what founders can do to protect themselves: 1️⃣ 𝘚𝘵𝘢𝘺 𝘞𝘢𝘳𝘺 𝘰𝘧 𝘙𝘦𝘥 𝘍𝘭𝘢𝘨𝘴🚩: Be cautious of high-pressure tactics or requests to convert cash into crypto for “proof of funds.” 2️⃣ 𝘗𝘳𝘰𝘵𝘦𝘤𝘵 𝘠𝘰𝘶𝘳 𝘊𝘳𝘺𝘱𝘵𝘰 𝘈𝘤𝘤𝘰𝘶𝘯𝘵𝘴: Never share your screen or login credentials with third parties. Use multi-factor authentication and secure wallets. Cold wallets (offline storage) are safer than hot wallets. 3️⃣ 𝘝𝘦𝘳𝘪𝘧𝘺 𝘌𝘷𝘦𝘳𝘺𝘰𝘯𝘦 𝘐𝘯𝘷𝘰𝘭𝘷𝘦𝘥: Independently validate the credentials of agents and investors through regulatory bodies like the FCA or other trusted sources. 4️⃣ 𝘚𝘢𝘧𝘦𝘨𝘶𝘢𝘳𝘥 𝘛𝘳𝘢𝘯𝘴𝘢𝘤𝘵𝘪𝘰𝘯𝘴: Consider escrow services for proof of funds or secure wallet features like whitelisting. 5️⃣ 𝘙𝘢𝘪𝘴𝘦 𝘈𝘸𝘢𝘳𝘦𝘯𝘦𝘴𝘴: Scammers often target founders who are fundraising. Let’s share stories, knowledge, and best practices to protect each other. 💬 I'd love to work we some investors and cyber experts to deliver a session on this topic. 💡 Share your fundraising scam stories below 👇🏾. ------------ I provide legal advice and support to startups, SMEs and VC - helping them from idea, through growth, to exit. 🔔 Want to see more? Follow Kevin Withane ♼Will this help someone in your network? Hit the repost button. #CryptoFraud #FundraisingTips #Entrepreneurship #Startups #DueDiligence #Founders #Investors

Tokens are poised to be the backbone of the digital economy, particularly in the context of data security. By removing the sensitive information of the card PAN (Primary Account Number) and replacing it with a random code, tokens help significantly reduce the risk of fraud and data breaches. The concept of token has in fact a long history that stretches way back before the rise of digital technology. Today tokens are used in many areas besides payments, such as security, digital authentication, and blockchain, i.e.: ◾In payments, tokens are critical for enhancing security and preventing exposure of sensitive data. ◾However, in blockchain, tokens might represent value or ownership within decentralised systems. ◾Meanwhile, in digital security, tokens authenticate users to access protected environments. Merely 10 years ago, the term "tokenisation" was rarely part of conversations with merchants. It's striking to see how much more technically acute we’ve all become, with tokenisation now seemingly part of most conversations I hear... although often framed within the context of fraud, auth and acceptance uplifts. The way tokenisation is implemented can vary depending on the payment network or technology used. The point at which tokens are created and detokenised determines how and where sensitive card data is managed. This is important because the security and compliance of the entire payment process depend on when and where the actual PAN is exposed. The PCI DSS directives (Payment Card Industry Data Security Standards) have been, since their inception, a significant driving force behind the adoption of tokens. In payments, PCI tokens are commonly used by merchants, payment processors, gateways and service providers to secure sensitive cardholder data, in compliance with PCI DSS. These tokens are securely stored in a vault and can only be used within the specific environment where they were created or issued. In recent years, there has been a growing focus on network tokens, rightly so! Network tokens are issued by card schemes (global or domestic) and offer superior features such as automatic token updates when a card is lost or expires. By being device-bound, they add an extra layer of protection by linking payment data to specific devices and are, by design, interoperable across different platforms and merchants. 👉🏽#Paymentexperts, any perspectives to share on #PCItoken vs #networktoken🎤? --- 𝑾𝒐𝒏𝒅𝒆𝒓 𝒘𝒉𝒐 𝒘𝒆 𝒂𝒓𝒆? 𝘞𝘦 𝘢𝘳𝘦 𝘢 𝘵𝘦𝘢𝘮 𝘰𝘧 𝘗𝘢𝘺𝘮𝘦𝘯𝘵𝘴 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘪𝘴𝘵𝘴 𝘣𝘭𝘦𝘯𝘥𝘪𝘯𝘨 𝘰𝘶𝘳 𝘪𝘯𝘥𝘶𝘴𝘵𝘳𝘺 𝘦𝘹𝘱𝘦𝘳𝘵𝘪𝘴𝘦 𝘸𝘪𝘵𝘩 𝘢 𝘤𝘳𝘦𝘢𝘵𝘪𝘷𝘦 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩 𝘵𝘰 𝘢𝘴𝘴𝘪𝘴𝘵 𝘰𝘶𝘳 𝘤𝘭𝘪𝘦𝘯𝘵𝘴 𝘵𝘩𝘳𝘰𝘶𝘨𝘩 𝘊𝘰𝘯𝘴𝘶𝘭𝘵𝘪𝘯𝘨, 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘺, 𝘙𝘦𝘴𝘦𝘢𝘳𝘤𝘩 𝘢𝘯𝘥 𝘛𝘩𝘰𝘶𝘨𝘩𝘵 𝘓𝘦𝘢𝘥𝘦𝘳𝘴𝘩𝘪𝘱 𝘱𝘳𝘰𝘫𝘦𝘤𝘵𝘴. ⏭ Follow Paypr.work [ˈpeɪpəwəːk] ⏭ Visit https://www.paypr.work/ ⏭ Sign up to learn more: https://lnkd.in/dVXjGkzB #paymentinfographics #payprwork