Crypto exchange Shakepay, which describes itself as “Canada’s fastest-growing bitcoin platform,” performed a “proof-of-reserves” audit and bought an insurance coverage coverage to strengthen its safety, maybe studying a lesson from fellow Canadian platforms QuadrigaCX, Einstein and Coinsquare, which all misplaced buyer funds or have in any other case been concerned in scandals over the previous 20 months.
The Montreal-based crypto exchange employed blockchain forensics agency CipherBlade to conduct a full audit of its reserves and safety insurance policies. To safeguard its prospects’ funds, the exchange additionally tapped a third-party custodian and secured a selected insurance coverage coverage for its chilly wallets via Aon, underwritten by insurers with Lloyd’s of London, the exchange introduced Wednesday.
Shakepay CEO Jean Amiouny informed Fintech Zoom the exchange helps bitcoin shopping for and promoting, however tries to not really maintain onto its prospects crypto holdings any longer than vital.
This reduces the danger that buyer funds might be stolen ought to the exchange be compromised.
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“ShakePay is built, not to hold your bitcoin [but] to send it out right away,” he mentioned. “What [our customers] do is they buy bitcoin and then they send it out to wallets they control … as a platform we generally don’t hold customer assets very long.”
The five-year-old exchange initially supplied a bitcoin debit card, however shut this system down after its issuer skilled some points. In 2018 the agency pivoted to bitcoin shopping for and promoting, and simply handed 100,000 customers, he mentioned.
Based on CipherBlade’s audit report, Shakepay’s reserves totally again its buyer belongings on paper.
“There was a 100% match between transaction data found in backend systems and amounts credited to user accounts accordingly relative to actual transaction amounts observed on the Bitcoin and Ethereum blockchains (for cryptocurrency transactions) and bank account records (for fiat transactions) in all transactions observed,” the report mentioned.
CipherBlade labored with Shakepay’s custodian and monetary establishments to confirm these figures, Amiouny mentioned.
Shakepay’s new insurance coverage covers all funds held in chilly storage, which means it covers “physical theft of the media where the private keys are held,” he mentioned.
The chilly storage, in flip, is offered by a crypto custody supplier regulated within the U.S. Amiouny declined to verify the custodian’s title on the document, citing safety issues.
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What Shakepay’s new coverage doesn’t present is particular person insurance coverage. It’s not like Federal Deposit Insurance coverage Company insurance coverage within the U.S., he mentioned.
The exchange additionally requested CipherBlade to evaluate the exchange’s personnel and safety processes, making a tiered entry system to make sure workers solely have entry to instruments they should conduct their jobs.
Nonetheless, CipherBlade claims “there is no evidence” that signifies Shakepay’s workers would possibly steal or in any other case divert the exchange’s funds, citing prison background checks it was offered.
The exchange is at the moment solely accessible in Canada, with no plans to develop past the nation, Amiouny mentioned.