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Cryptocurrency News Articles
Is OKX Safe and Trustworthy? A Critical Review of Its Security Features
Oct 21, 2024 at 02:15 pm
When picking a cryptocurrency exchange, the first question on everyone’s mind is often: Is it safe & legit? Platforms like OKX must offer more than just a wide variety of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) — users need reassurance that their assets will be secure.
OKX is a cryptocurrency exchange that has been around for a long time and is known for its high level of security. They use industry-standard protocols like two-factor authentication (2FA) and advanced encryption to protect user accounts. They also have a good track record when it comes to hacking, with no major incidents reported to date.
Here's a closer look at some of the security features that OKX offers:
95% Cold Storage: OKX stores the vast majority of user funds—95% to be exact—in cold wallets that are kept offline to protect them from potential online threats like hackers. This is a crucial measure to ensure the safety of user assets.
Private Key Storage Mechanism: OKX employs a secure system for handling private keys, which are essential for accessing cryptocurrency funds. These keys are created on an offline computer and immediately encrypted using the Advanced Encryption Standard (AES). The original, unencrypted keys are then deleted, leaving only the encrypted version.
The encrypted private keys are not stored digitally but instead converted into QR codes, which are printed and securely stored in bank vaults. To enhance security further, backup QR codes are stored in different vaults across multiple countries. This ensures that if anything happens to one location, the backups are available to maintain access to user funds.
OKX also follows a unique approach where no single person has complete control over the cold wallet system. The password used to decrypt the private keys is split between two employees who live in different countries and are not permitted to travel together or even be in the same vehicle.
This measure is in place to ensure that if something happens to one employee, the other is still available to maintain the security of user assets. Additionally, the employees who have access to the bank vaults where the QR codes are kept are different people entirely, preventing any single individual from accessing all aspects of the cold wallet system.
Online Storage with Multi-Sig Mechanism: OKX understands that some funds need to be quickly accessible for deposits and withdrawals, which is why they created a semi-offline system of hot wallets to handle these transactions securely.
They use a special semi-offline multi-sig system to process transactions safely and quickly. One key difference here is that OKX does not use typical internet protocols when processing transactions.
Instead, they have built their own signature service that reduces the risk of cyber attacks, keeping your funds secure even during deposits and withdrawals.
A crucial part of this security system is how OKX handles private keys. These keys, which are essential for accessing your cryptocurrency funds, are stored in the RAM of semi-offline servers instead of on permanent memory.
This might sound technical, but it basically means that even if someone got physical access to the servers, they wouldn’t be able to steal the private keys.
What’s also great about OKX’s multi-sig system is that no one person can control the funds. They create 3 private keys, each held by different employees in separate locations. To authorize any transaction, at least two of these keyholders must approve it, ensuring that no single person can act alone.
OKX Risk Shield: OKX has a reserve fund called the OKX Risk Shield, which acts as a safety net for user assets on the platform. This fund is created by setting aside a portion of OKX's own earnings, specifically to protect users in case of any unexpected events, such as a security breach or other issues that may arise.
The OKX Risk Shield ensures that if there's ever a problem, your assets are covered up to the total amount in the fund. This provides an extra layer of security and peace of mind for users, especially in the volatile world of cryptocurrency.
Anti-Phishing Code: OKX offers a smart feature called the anti-phishing code, which helps protect users from phishing scams. It's like adding a personal stamp to your emails from OKX, making it easy for you to know whether an email is genuinely from them or a fake.
If you get an email that looks like it's from OKX but the code isn't there, you can instantly tell it's not legit. This is incredibly useful because phishing scams are sneaky – they're designed to trick you into giving up your account details or clicking harmful links.
Having your own code is a simple and effective way to stay one step ahead of fraudsters.
Withdrawal Address Whitelisting: OKX provides a powerful feature called withdrawal address whitelisting, which allows users to specify which wallet addresses are permitted for withdrawals. Anything outside of that list is automatically blocked.
This means that even if someone tries to hack your account, they can’t move your funds to any random wallet they control. It's a great way to protect your cryptocurrency from unauthorized withdrawals.
Passkeys: OKX is embracing the latest technology to enhance account security. They offer passkeys, which are more secure than traditional passwords.
Instead of typing in a password that could be guessed or stolen
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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