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7 Burning Issues for Crypto Cold Storage

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Learn about the key components of a risk assessment
for crypto cold storage providers.

Published in: Business
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7 Burning Issues for Crypto Cold Storage

  1. 1. 7 Burning Issues for CRYPTO COLD STORAGE Key Components of a Risk Assessment for Crypto Cold Storage Providers
  2. 2. TWO DEGREES OF CRYPTO STORAGE • Connected to the internet • Can access (and therefore be accessed by) other parts of the internet • Vulnerable to attack • Typically used to house only what the investor plans to spend in the short term • Not connected to the internet • Entirely removed from the internet ecosystem • Often stored on a device that looks like a USB stick or even a piece of paper HOT COLD investopedia.com
  3. 3. 7% of Bitcoin supply held in cold storage vaults by one company Demand for cold storage vault services is on the rise. Bloomberg, May 2018
  4. 4. Do you understand the risks?
  5. 5. Components of a Risk Assessment for Cold Storage Providers 7
  6. 6. THE RIGHT SAFE FOR THE JOB The physical security of the vault must match the value of the asset. 1
  7. 7. 2 CONTROL OF DIGITAL THREATS Digital assets are vulnerable to magnetic or radio radiation, by malicious intent or by accident. Storage areas should be shielded, including all access routes on the premises. No devices capable of memory or carrying magnetic fields can be allowed in the vicinity of the asset.
  8. 8. 3 CONTROL OF PHYSICAL THREATS Access control must-haves: CCTV coverage Recordings kept a minimum of 30-45 days Guard presence required Escorts required for vault access
  9. 9. 4 IDENTITY VERIFICATION Properly vet and identify any person requesting access to the vault or its contents: Employees Customers Drivers Guards Managers
  10. 10. 5 DUAL CONTROLS Every hand-off and every episode of access to the asset should be under dual control, with appropriate segregation of duties.
  11. 11. 6 ACCESS LOGS Every event in the vault is logged according to an established procedure. Personnel on the ground make the entries and sign off on them. Records maintain an audit trail including the nature and value (if known) of the digital asset.
  12. 12. The mission of the vault Known threats to safety and security Job-specific duties required to mitigate risks 7 PROCEDURAL INTEGRITY Every employee must have verified training and understanding of:
  13. 13. LEARN MORE WHITEPAPER Custodial Crypto: Transportation and Storage Download a copy at lowersrisk.com
  14. 14. lowersrisk.com

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