Brian Armstrong, CEO and Co-founder of Coinbase, spoke about the security measures taken by the platform to secure cryptocurrencies, in an interview with Fortune’s Jeff Roberts.
The interview began with Brian speaking about cryptocurrency custodial solutions. Armstrong affirmed that cryptocurrencies were “definitely” a new asset class, adding that several people were curious about how they actually store cryptocurrencies. Armstrong stated that the firm “put a lot of work” in building secure cryptocurrency storage, claiming that they have the “best track record of doing that since back in 2012.”
This was followed by Armstrong giving a brief overview of how the firm provides secure crypto storage. He said,
“[…] It starts by doing a key generation in a very secure manner and you need to do that with large degrees of randomness and you need to make sure you’re doing it in a way where nobody could eavesdrop on it or end up with a copy of the key. There’s a lot of really cool tech including Faraday Cages”
Faraday Cages, here, refer to lead-shielded rooms. These rooms block all electromagnetic radiation to ensure that a third-party cannot read device data. Armstrong went on to state,
“[…] we start by generating these keys really securely in a secure environment and then we break them up into pieces for the purposes of this […] to be able to restore the secret. We then distribute, we encrypt those pieces with an HSM and we distribute them globally around the world to these level 4 data centers”
Armstrong also spoke about a scenario where the theft could be an inside job, and the exchange not realising that the cryptocurrencies were missing for months. To this, the Co-founder stated that Coinbase underwent a regular audit, during which audit firms verify whether the company had all the cryptos they claimed to own.
Coinbase also has a cyber-crime insurance policy, which covers everything from inside threats to external hacks, he added. The addition of the insurance aspect was “really important” for institutional clients, he claimed.
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