By Sam Mkhize Head of Compliance for Binance in Africa
The World Economic Forum (WEF) recognizes blockchain as a technology capable of creating innovative opportunities and disrupting existing businesses by enabling decentralized digital transformation. It excels in embedding trust, improving data and information sharing, eliminating unnecessary intermediaries, and finding applications in various domains, including cryptocurrencies, financial services, data tracking, contract management, and bolstering data security.
The technology offers a rich feature set that, when boiled down to its core, enables users to share information and value within a tightly secured ecosystem that meets specific needs.
One such use case – perhaps the most well-known example that brought blockchain into the public eye – is within the cryptocurrency space. While blockchain, like any other technology, isn’t immune to cyber threats, it is naturally resilient and provides various security benefits.
However, this security isn’t inherent within the technology; it must be built into the architecture. Security is a conscious decision and is achieved through design, not by default.
This means that blockchain within the crypto space is as secure as the organizations that use it, including industry leaders like Binance, and their commitment to a robust and agile security framework. A secure infrastructure within a company dedicated to security typically means that blockchain will deliver on its promise of being one of the most reliable forms of protection on the market today. However, achieving an almost impossible-to-hack status requires that any business using blockchain, especially in the financial and cryptocurrency sectors, takes at least the following three steps:
01: Collaboration with third-party experts and law enforcement agencies.
Scams and fraud cases are inevitable on any financial platform, so a service provider that collaborates with law enforcement to combat threats against users and the cryptocurrency community is clearly prioritizing user and ecosystem security. You want a platform that actively seeks ways to identify, address, and mitigate bad actors through collaboration with security professionals and law enforcement, and by providing ongoing education within the community and for users.
02: Proactive security and compliance measures.
Protecting the user is a priority, and this requires companies to go beyond collaboration and into the realm of proactive threat and scam mitigation. A robust compliance program that incorporates best practices in anti-money laundering (AML) principles and tools should be further strengthened by a strong Know Your Customer (KYC) and Know Your Business (KYB) approach. A company with KYC, KYB, and AML approvals from multiple countries demonstrates a proactive commitment to user protection.
03: Investment in talent that prioritizes security.
You want your exchange platform, such as the one offered by Binance, to have a solid team of compliance and investigations professionals with backgrounds as regulators, senior investigators, law enforcement agents, and cybercrime investigators. This is crucial to ensuring that your chosen platform can respond to law enforcement requests and potential scams and threats promptly.
Relying solely on the strength of blockchain isn’t enough. There are weaknesses, potential vulnerabilities, and common-sense considerations – no technology is invulnerable. That said, when supported by investment in security solutions and best-in-class methodologies, blockchain becomes intensely secure and resilient, providing peace of mind for those who want to expand their cryptocurrency investments and portfolios within a platform that prioritizes trust and stability.