Demand for a strong security is rising as the digital asset industry is growing and becoming more vulnerable to cyber threats. This is where qualified digital asset custodians become predominant by providing high-level secure storage and management of digital assets on behalf of their clients. Therefore, it is crucial that enterprises must mitigate these risks by implementing Zero Trust Model (ZTM), a security framework that assumes distrust in users or devices unless verified or authenticated. In this blog, we will explore why qualified digital asset custodians need ZTM, and how it applies to security, compliance, and fraud prevention.
What is the Zero Trust Model?
The ZTM is a concept based on the principle of “never trust, always verify.” It implies that devices should not be trusted by default even if they are connected to an authorized network. All users, devices, and applications are assumed to be untrustworthy and hostile, thus, verification is required prior to gaining access to the system. Hence, ZTM can protect clients from data breaches, prevent unauthorized access, and limit the potential impact of any cyber threats. It offers a comprehensive and efficient security system that is particularly relevant to the digital asset industry.
Why must Qualified Digital Asset Custodians have it?
As qualified digital asset custodians are responsible for safeguarding their clients’ digital assets, they must ensure that their security measures are robust and reliable. This can be achieved through ZTM as it provides a higher level of security and a resilient infrastructure that offers granular access controls, network segmentation, and continuous monitoring of user activities. In addition to strengthening security, ZTM also helps promote regulation compliance and facilitate fraud prevention.
Security
ZTM is based on the principle of least privilege, in which users only have access to data and resources on a limited basis under certain circumstances. This is achieved through the use of multi-factor authentication (MFA) and policy engine that enables specific user to gain particular data. Additionally, real-time monitoring and logging of all activities, including user and application behaviour, are conducted to identify and respond to threats, providing an extra layer of security.
Enhanced Compliance
ZTM assists qualified digital asset custodians in complying with various laws and regulations, including anti-money laundering (AML) and know-your-customer (KYC) requirements. It also facilitates the monitoring of audit trails and activity logs. In addition, ZTM allows digital asset custodians to confirm that they are implementing a security framework that aligns with the latest industry standards and international practices to ensure the safety of clients’ assets.
Fraud Prevention
ZTM mitigates fraud by dividing the network into micro-segmentations, which limits the impact of a breach and prevents any further movement within the network. This approach reduces the attack surface and makes it more difficult for attackers to navigate the system. Additionally, although one segment of the system might be violated, the ZTM shields the breach from spreading onto another division. Hence, the alleged violation will be promptly removed from the network. Furthermore, ZTM provides centralized access control, enabling convenient enforcement of security policies across the organization and reducing the complexity of managing and minimizing potential errors.
Conclusion
Cryptocurrency cyberthreats increase as the industry expands, implementing ZTM can provide important benefits, including strengthen security, enhance compliance, and support fraud prevention. With least-privileged access controls and strict user authentication, ZTM can ensure that only authorized users and devices have access to protected materials. Overall, ZTM is a comprehensive security framework that promotes protection and security of clients’ digital assets while also maintaining compliance to regulations.
At Rakkar Digital, we prioritize the security of our clients’ assets and use multi-factor authentication (MFA) as one of our security strategies to verify and authenticate clients when using our custody. Furthermore, we emphasize multi-layer security, transparency with proof of assets, compliance regulations, and enterprise-grade services through our best-in-class custody solution. Therefore, clients can rest assured that their assets are safe with us.
