Kraken announced that it has co-founded the Blockchain Security Standards Council (BSSC) with several other major industry players to enhance security within the crypto sector.
The other co-founders include Anchorage Digital, Coinbase, Fireblocks, Bastion, Figment, Halborn, OpenZeppelin, Ribbit Capital, and Sentinel Global.
Consensus-driven security
The nonprofit organization aims to create uniform security standards across the crypto industry, addressing pressing security threats such as fraud, nation-state cyberattacks, and protocol exploitation.
The council’s mission is to develop consensus-driven security benchmarks and a robust audit process by the end of 2024. These efforts are expected to fortify the industry’s security framework and enhance trust in digital assets.
Kraken Chief Security Officer Nick Percoco emphasized the importance of these initiatives, stating:
“Voluntary security standards are crucial for the maturation of the crypto industry. Collaborative efforts among industry players to strengthen the overall ecosystem will enhance confidence in cryptoassets. Kraken is proud to contribute to the development of these essential standards.”
The BSSC also plans to engage with regulators and policymakers to ensure the development of balanced and effective security standards. This proactive engagement aims to protect consumers while fostering innovation within the blockchain ecosystem.
Kraken’s involvement in the BSSC reflects its ongoing commitment to security, following its role in establishing the Crypto Information Sharing and Analysis Center (ISAC). The ISAC facilitates knowledge sharing and best practices across the crypto sector, aiming to reduce cybersecurity risks and enhance the industry’s overall resilience.
The formation of the BSSC is seen as a significant step towards addressing the blockchain trilemma, which involves balancing decentralization, security, and scalability. By focusing on security standards, the BSSC aims to mitigate risks while supporting the growth and scalability of blockchain networks.
White-hat drama
The move comes in the wake of Kraken’s recent dispute with blockchain security firm CertiK.
In June, the exchange encountered a major security challenge when blockchain security firm CertiK uncovered a critical vulnerability in its system. This flaw enabled attackers to initiate deposits and receive funds without completing the deposit process, effectively allowing the creation of assets from nothing.
CertiK exploited this vulnerability to withdraw $3 million from Kraken’s accounts, which led to many claiming that the withdrawals were too excessive for testing purposes.
Kraken also accused CertiK of extortion, arguing that the firm demanded payment for the return of the funds, deviating from standard bug bounty protocols. The exchange criticized CertiK’s approach, alleging it held the funds hostage and acted unprofessionally.
However, CertiK denied any malicious intent, asserting that its actions were preventive and aimed at securing the platform. It contended that Kraken’s threats towards CertiK employees were unwarranted and emphasized that it had offered to return the funds, but the exchange had not provided a wallet address.
The dispute was settled after both firms went public with their sides, and CertiK returned the funds to addresses it had on hand.