Earlier this year, we reported that, for the first time, a major venture capital firm, Union Square Ventures, invested in a blockchain hedge fund. But thats not all thats been invested in blockchain technology. By next year, 90% of central banks and 80% of financial banks will have engaged in some form of investment, programming, or planning to incorporate blockchain into their main business functions and workflows. But with cybersecurity a main determinant in which blockchain companies and cryptocurrencies receive investment, blockchain fintech companies need to be vigilant when protecting their assets from any intruder.
In this regard, one such company rises above the rest. Its name is AxionV, and it is currently about to undergo its Initial Coin Offering (ICO) on September 16. AxionV is an AI crypto fund which uses proprietary algorithms and complex trading strategies to achieve much better returns for your money. Their information caught my eye because it stood out in several ways, including its unparalleled security, which is something I look for when analyzing ICOs and crypto trading. In a nutshell, the AxionV ICO seems like a unique and interesting project, because it gives access to top talent in the trading space to anyone, not just established traders.
Founded by professional traders and blockchain technology experts, it takes pride in implementing leading security protocols to ensure that company operations will continue in virtually any situation without major interruptions.
When looking for security frameworks, AxionV made the strategic decision to benchmark to institutions outside of finance that already have the highest need to be as safe and secure as possible. This is why the Nuclear Energy Institute was selected as the model framework for the firm. Beyond this, to offer clarity on jurisdiction and regulatory issues, AxionV is developing five legal teams established throughout the Asia-Pacific, Europe and Americas regions to address regional issues in order to protect the firm and its potential investors while engaging directly with local governments and advisory committees. This is the framework consisting of five risk categories. While the majority of ICOs using blockchain could claim relative software security, the other 4 layers are most often omitted.
Blockchain currently is one of, if not the most secure protocols that is luckily, also open-source.
AxionVs technology actually minimizes the use of smart contracts, leading to more security for clients and less risk to the company. This is notable and perhaps counterintuitive because one of blockchains most lauded features is the ability to create smart contractsthat is, contracts recorded on the blockchain which execute themselves.
AxionV has a reason for this: the widely reported attack on the DAO (Decentralized Autonomous Organization). Last year, a lone hacker attacked the DAO, the largest crowdfunded Ethereum blockchain organization in history at over $150m. This hacker discovered a vulnerability in the DAOs smart contract integrity, and isolated and attacked a highly valuable smart contract, siphoning over 3.6 million Ether from the organization into a child DAO with a mirroring structure. Due to this, the price of Ethereum dropped 35% last year. Yet, since AxionV mostly excludes smart contracts from the code handling of any tokens, the result is a more stable and fork-resistant token.
Hardware security offers another important layer of protection. We often trust the largest manufacturers such as Apple, Intel, HP, etc. to not insert any special chips inside the machines as backdoors, but given their proprietary nature, its always a possibility.
Whether it sounds unrealistic or not, history teaches us many breaches of hardware security will occur. One of them is mentioned by Kevin Mitnick a renowned security consultant and hacker. A program one hacker favored was called Spy Lantern, a hardware based program with the ability to monitor and record computer activities as a target works, allowing the hacker to secretly intercept every keystroke typed on the target’s computer system except that this one is supposedly completely invisible on the target’s machine.
The AxionV teams advantage compared to the competition is that they monitor hardware by verifying every machine to identify potential security breaches before deployment. AxionVs protocol involves fully assembling proprietary machines on site or directing private orders from the top manufacturers only.
Every company attempts to fully protect its information from the outside world. Perfect information protection is impossible, because employees are humans who constantly interact with the outside world. Many companies, to save expenses, install WiFi and connect machines / computers / servers with private information to WiFi. This creates a huge threat. Intruders, once they learn the password to the WiFi, can access the entire system by starting as an average user account, and increasing its access rights using a variety of techniques.
In reality, there are very few companies with sufficient educational programs that cover environmental security. Most often, theres just too much ground to cover.
AxionVs solution to environment security is to divide infrastructure into two main parts: internal and external. The internal infrastructure has no connection to the outside world, and it is fully isolated within its own environment, much like in a nuclear plant. It will be completely disconnected from the internet or people who dont have the access rights. External, on the other hand, will be public and open, accessible to virtually anyone. The idea itself is inspired by Blockchain in that it also uses a combination of a public and a private keys to produce maximum security.
Every person is a source of information. Every employee has access to some piece of valuable information that can be used against the company without realizing it. These pieces of information can help intruders get access to private information. Even corporate slang or references used outside of the workplace can be used by hackers adept at social engineering to access protected information.
Many organizations decide not to even pay attention or even consider this aspect, thinking its very unlikely it will happen. However, this is a very important factor to consider. NDAs do not work either they serve more as a psychological protection, but not as a real protection against intruders and accidental disclosure.
Examples of security breaches with failed security protocols include Julius and Ethel Rosenberg who committed espionage and gave out nuclear program of the U.S. to the Soviet Union. Or Edward Snowden, who worked at the CIA and deliberately leaked lots of information.
AxionV uses structured access to information for every employee, including provisions for loss of any employees. Every employee goes through extensive training about which information they have access to and what ways this information can be stolen from them.
Given the current landscapes throughout the world regarding blockchain, ICOs, Startups and investing, anticipating and strategic legal strategies are needed to maintain a business like AxionV. Multiple regulatory bodies have already made their stances known, but real laws and binding decisions have been mercurial so far. AxionV has developed a roadmap to combat the nature of attorneys own conflicts of interests and how to deal with the worldwide regulatory uncertainty. The strategy is to seek multiple opinions from its five legal teams and always go with the most conservative decision. AxionV willingly works within local regulations as a thought leader with the goal of helping the blockchain world develop and utilize a robust Know your Customer (KYC) and Anti-Money Laundering framework that will punish violators and reward honest clients. Currently, it is considering an advanced adaptation of the proposed SAFT or Simple Agreement for Token framework, which has been modeled from SAFE from Y Combinator, as a simple framework established between VCs and startups.
Overall, I see how AxionV is leading the way in cyber security in this space, providing the framework for future ICO launches that need to be more secure, while providing immediate value to those who invest in the ICO as the AI trades and increases the value of the fund. For more information, Ive found their website and blog to both be great resources for information about their upcoming ICO as well as the future of the fund.
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