Guarding everything from cash transfers to prisons, it was a matter of time before international security giant G4S flexed its muscles in cryptocurrency.
Yesterday (October 17) the security firm announced it now offers high-security offline digital currency storage – a result of demand from clients including an unnamed European cryptocurrency exchange itself.
The company cited exchanges’ “unique requirements” to other financial markets and the cryptocurrency trading’s “immaturity” as reasons for its vulnerabilities, with the largest exchanges accommodating up to $1.7bn per day in trading volume.
Indeed, a recent report by cybersecurity firm CipherTrace estimated that close to $1bn was stolen from cryptocurrency exchanges alone this year.
What G4S is offering is an offline storage solution, using its existing vaults, which is charged based on the number of offline storage devices they want to use to store their private keys.
While the group said its Cash Solutions arm is a global expert in payments, carrying out extensive research into payment trends around the world, it said that there is “no greater contrast” in the financial world between conventional cash used for thousands of years, and cryptocurrencies, which have existed since 2008. However, certain vulnerabilities have remained unchanged.
“The original goal of cryptocurrencies was to redesign the fundamental architecture of money” said Dominic MacIver, senior risk analyst at G4S Risk Consulting.
“Although some early adopters have made enormous returns, the sector has attracted the same old threats for financial systems, including robbers, scammers, market manipulators and many others.
“Our innovative security solution helps protect against some of those threats by taking the assets offline and storing them in high-security vaults. This gives people and businesses peace of mind to trust that their crypto-assets are secure.”
That protection goes beyond just cold storage, however. Its Risk Consulting group can also advise clients on threat identification and risk mitigation, including those posed by armed attacks.
“We not only take the assets offline but break them up into fragments that are independently without value and store them securely in our high-security vaults, out of reach of cyber criminals and armed robbers alike,” explained MacIver.
“Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only when all the fragments are combined with specific technology can they unlock access to the value stored within.”
Last month, hackers stole an estimated $59m (£45m) from Japanese cryptocurrency exchange Zaif, while at the start of the year, Coincheck’s loss of $530m (£397m) to criminals ranked it as the largest theft of its kind on record. Those are just two of at least five hacks on cryptocurrency exchanges reported this year.
Security flaws among the major players of the cryptocurrency market have been regarded as one of the main reasons that corporate adoption has not been fast-paced.
“It has been a justified cliche to describe the cryptocurrency space as a Wild West,” MacIver added.
“Working with our clients, our innovative vault storage concept offers the highest protection to keep people and their assets secure and bring order to the frontier.”
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