In a recent announcement, Kraken revealed its co-founding of the Blockchain Security Standards Council (BSSC) alongside several prominent industry players. The formation of this nonprofit organization aims to establish uniform security standards within the crypto sector, addressing critical security threats such as fraud, nation-state cyberattacks, and protocol exploitation. The council’s mission involves developing consensus-driven security benchmarks and an audit process by 2024 to strengthen the industry’s security framework and build trust in digital assets.
Kraken’s Chief Security Officer, Nick Percoco, stressed the importance of voluntary security standards for the maturation of the crypto industry. He highlighted the need for collaborative efforts among industry players to enhance confidence in cryptoassets. Kraken’s participation in the BSSC signifies its dedication to security, following its involvement in establishing the Crypto Information Sharing and Analysis Center (ISAC) to promote knowledge sharing and best practices in cybersecurity across the crypto sector.
The BSSC has also outlined plans to engage with regulators and policymakers to ensure the development of balanced and effective security standards. This proactive approach aims to protect consumers while fostering innovation within the blockchain ecosystem. By collaborating with external stakeholders, the council seeks to establish a robust framework that balances decentralization, security, and scalability in blockchain networks.
However, the establishment of the BSSC comes in the aftermath of Kraken’s dispute with blockchain security firm CertiK. In a security incident earlier this year, CertiK discovered a critical vulnerability in Kraken’s system that allowed attackers to exploit deposits and receive funds without completing the deposit process. This flaw resulted in the withdrawal of $3 million from Kraken’s accounts by CertiK, leading to accusations of excessive withdrawals and extortion by Kraken.
The dispute between Kraken and CertiK was eventually settled after both parties went public with their perspectives on the incident. CertiK maintained that its actions were preventative and aimed at securing the platform, while Kraken criticized the firm’s approach and demanded the return of the funds. Despite the resolution of the conflict, the incident highlighted the importance of robust security measures and ethical practices in the blockchain industry.
The establishment of the Blockchain Security Standards Council by Kraken and other industry players signifies a step towards enhancing security standards and promoting trust in digital assets. While collaborative efforts and proactive engagement with regulators are crucial for the industry’s development, challenges and disputes like the one between Kraken and CertiK underscore the need for vigilance and transparency in addressing security vulnerabilities. By prioritizing security standards and ethical practices, the crypto sector can build a more secure and resilient ecosystem for stakeholders.
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