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The Importance of Safety When Using Self-Custody Platforms

Safety is one of the most important topics of the crypto sphere, and with good reason. Even the most significant self-custody platforms, such as OpenSea, are vulnerable to malicious behavior and attacks. Read on to find out why security should be your number one priority, and learn from a recent, serious phishing attempt on OpenSea.

What does self-custody mean?

Essentially, self-custody in crypto refers to holders’ sole responsibility to handle and store their information data such as private keys. Consequently, a self-custody platform does not keep any kind of record of private keys, and thus delegates the task of safeguarding them to key owners.

About the OpenSea phishing attack

Phishing is a type of malicious activity that manipulates the victim into sharing confidential credentials or information, mostly by fake communication. Phishing is a serious threat even today, and it’s also one of the hardest attacks to discover, as it’s disguised as ordinary messaging.

To demonstrate how real this issue is, here’s the recent case of OpenSea, one of the most important Non-Fungible Token (NFT) marketplaces of its time. According to official sources, the phishing attack influenced 32 platform users, who actually suffered damages to their holdings because of the event. The company’s CEO, David Finzer, highlighted that the attack is likely not directly connected to OpenSea’s platform, and users signed the malicious action elements somewhere else, which just underlines the significance of keeping your sensitive data safe when using a self-custody platform.

Overall, while some rumors said that the stolen value was somewhere in the $200M range, David Finzer mentioned that the address, which they believe to be the hacker’s, has $1.7M to its name, which is still an outstandingly high figure.

Why should safety be a priority?

With the advancement of technology came the progress of hacks as well, and so nowadays, it’s more important than ever to take all the necessary precautions that aim to prevent such events. This is especially true when using self-custody platforms, since it’s the users’ responsibility to safeguard their private information, including their private keys.

The reason why safety should come first is quite straightforward: the more one accumulates, the better the target for hackers, and if security is neglected, all those hard-earned funds can permanently disappear, faster than one would think.

Implications of safety while trading

Safety is also vital when it comes to trading cryptocurrencies, be it on a centralized exchange (CEX), or a decentralized exchange (DEX). Unfortunately, there are very few platforms out there that actually put sufficient emphasis on the topic. A great example of a DEX that ticks the box of high-level security is FOMODex, which is a multichain automated market maker (AMM), supporting Binance Smart Chain (BSC), Ethereum (ETH), and Polygon (MATIC). The platform recognized that without proper safety measures, everything else is basically useless, as results are only as good as their protection. Therefore, its team reportedly created FOMODex to be one of the most secure DEXs, despite its multichain environment and high volume of transactions. To further emphasize this, FOMODex launched as the first DEX that is regulated in the U.S., which means users’ protection is elevated, and grounds are provided for legal cases, should fraud occur. This is a remarkable achievement, as U.S. regulators are notoriously hard to get approval from.

Final thoughts

As demonstrated by both theory and real-world events, safety is truly one of the most overlooked, yet extremely vital aspects of dealing with cryptocurrencies. However, with next-generation platforms and users recognizing its importance, proper security will become the number one feature users look for when choosing where to conduct business in the near future.

About Sean Patterson

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