Why should you integrate Two-Factor Authentication into your Crypto Exchange?
Volatility may be considered the biggest threat to the crypto traders and investors, but apart from that, it is the security of funds that the traders are concerned about. Though many traders have shifted to cryptocurrency wallets (hot or cold storage wallets) to store their funds, various traders still keep their funds in the crypto exchange’s wallet.
The incidents of crypto exchange hacks have increased in the recent past. In 2019 only, a total of $292,665,886 worth of cryptocurrency and 510,000 user logins were stolen from 11 crypto exchanges, according to Cointelegraph.
Thus, to safeguard the funds of your platform users, it is important that you fortify the security of your exchange and integrating 2FA (two-factor authentication) feature in your white label crypto exchange is one of the measures to enhance the security.
Two-factor Authentication: Significance
2FA adds an extra layer of security to your exchange platform. Cybercriminals indulge in various social engineering activities and can hack your users’ IDs and passwords with the help of the internet. However, 2FA prevents cybercriminals from accessing your users’ accounts, thus providing appropriate measures to safeguard their accounts.
A traditional example of 2FA
Two-factor authentication has been in practice for a long time. For example, a bank locker — if you want to operate your bank locker, one key is held with you and another is with the bank. Both the keys (with you and your bank) are required for you to access the valuables in your account.
Working of Two-factor authentication
The working is not that complicated, as it may sound. User ID and password will remain the same while signing in to the white label crypto exchange or a customized crypto exchange, but only an extra step is required to safeguard the funds. It may be in the form of OTP (One Time Password) that is sent onto your mobile phones or an app like a Google authenticator that verifies the authenticity of a user. This additional information needs to be inserted after your users enter their required credentials into the exchange login.
Thereby, the users should make sure to never share their email password, mobile password or any other piece of code with anyone, as it would enable the cybercriminals to get a hold on your users’ accounts.
Advantages of Two-factor authentication
The benefits of two-factor authentication include the following:
- Advanced security
As we have already mentioned, 2FA surely adds an extra security layer to your exchange. Even if in any case hackers manage to intrude into your exchange, they would only be able to gain access to your users’ ID and password through phishing, baiting, and any other activity, but not to the second layer of security.
The essence is that the hackers would not gain access to your users’ email account or OTP, thus enhancing the security paradigm.
- Improved accessibility and productivity
Two-factor authentication serves the purpose of security by just sitting at the back and there is no need to reach out to people physically. There is no need to hire staff managers to maintain the confidentiality of users’ accounts or information.
For instance, even if your users log in to your cryptocurrency exchange account from some other system, even then no one else except your users will be able to perform the transactions.
- Efficient customer query management
There are many instances where businesses face difficulty in managing the questions of users that are related to their account. It generally requires a lot of time and effort on the part of the management. However, two-factor authentication allows your users to reset their own passwords in a safe manner by using the combination of an email address and phone OTP or any other way integrated into the exchange.
- Ceases identity theft
Identity theft is a serious crime where a hacker obtains your key personal information and impersonates to be someone else. Identity fraud is reported to be one of the greatest concerns with which the whole world is dealing. But two-factor authentication comes as a rescue as it establishes a proper mechanism to safeguard the user’s identity.
In present times, two-factor authentication has emerged as a necessity rather than an option. The integration of two-factor authentication into white label cryptocurrency exchange software, or the exchange built from scratch, can enhance the overall security of your exchange platform.
If you are planning to build your crypto exchange, we can provide you with a highly-secure platform integrated with market-leading security features. Whether you need to white label exchange or want to build a custom crypto exchange from scratch, we deliver a secure solution that aligns with your business requirements.
Schedule a free demo of our white label crypto exchange or connect with our subject matters experts to share your requirements for a custom exchange or get expert advice on anything related to crypto exchange.