2024: 5 Important Developments in BlockChain Security
written by: Justine Bone
The Crypto ISAC aims to enhance trust in crypto and blockchain-based solutions. Security underpins that trust. Below are five key crypto security accomplishments observed by the Crypto ISAC during 2024.
Developments in On-Chain Risk Management and Compliance Technologies
Frameworks are under development that facilitate continuous on-chain risk management and policy compliance for critical blockchain-based solutions such as Decentralized Finance (DeFi). This ensures that authentic DeFi platforms, which uphold the principles of neutrality, autonomy, and decentralization, can continue to enable users to engage in economic transactions without relying on intermediaries while simultaneously enhancing security and fulfilling both existing and forthcoming compliance obligations.
Illicit Blockchain Activity Remains Minimal as Crime Fighting Intensifies and Crypto-Related Crimes Decline
Cash is the primary medium of exchange facilitating illicit financial transactions, with less than 1% of blockchain transactions associated with illegal activities. Furthermore, crypto-related crime saw a 20% decline in the first half of 2024. The immutable, transparent, and ephemeral characteristics of blockchain technology are enhancing the investigative capabilities of law enforcement and other agencies. On-chain, investigators have access to the same data that was once only readily available to risk managers within traditional financial institutions. On-chain investigators are also able to review blockchain records irrespective of their geographic origin and without the need for subpoenas or special agreements with foreign jurisdictions, supporting international crime-fighting efforts and enabling faster response times.
The Acceleration of Crypto Security Hiring with Increased Emphasis on Due Diligence and Background Checks
The demand for blockchain-based solutions is increasing, concurrently driving the need for highly skilled professionals, including blockchain security engineers, blockchain security architects, smart contract auditors, and risk managers with expertise in cryptocurrency and blockchain technologies. As the demand for blockchain-related roles continues to grow, so too does the necessity for strengthened security measures to protect against emerging threats, including those posed by malicious actors, particularly nation-state-backed entities. Threats such as IT-worker impersonation are being mitigated through rigorous background checks, the implementation of camera-on protocols, the use of deepfake detection technologies, and the requirement for mandatory in-person interviews.
Privacy Enablement
Zero-Knowledge Proofs (ZKPs), Multi-Party Computation (MPC), and other privacy-enhancing technologies are being actively developed to strengthen user privacy on blockchain networks.
These advancements enable individuals to demonstrate they meet certain criteria without disclosing sensitive personal information. Furthermore, these innovations are fostering the development of sophisticated identity management and access control solutions. These initiatives not only improve individual privacy but also facilitate compliance with privacy-oriented regulatory requirements like GDPR, positioning blockchain as a robust solution for sensitive applications in finance, healthcare, and other critical industries.
Proactive Security Measures
Blockchain’s inherent transparency establishes an open-source environment where individuals and entities with the requisite expertise can analyze code, monitor transactions, and detect behavioral patterns indicative of potential, planned, or active cyberattacks. Risky activities can be identified, and threats mitigated, through the continuous and automated assessment of transaction risks. Moreover, frameworks are being developed to formalize cryptocurrency asset rescue operations, which involve identifying vulnerabilities and preemptively addressing planned attacks that jeopardize funds, thereby ensuring their security or recovery. This unparalleled level of visibility and control surpasses what is achievable in traditional Web2 technology stacks, with artificial intelligence further enhancing and scaling these capabilities.
The Crypto ISAC was established in 2024 to help foster confidence in the safety, security, efficiency, and resiliency of the cryptoasset and blockchain industries. To further discuss these innovations or to learn more about Crypto ISAC membership, reach out here.
About Crypto ISAC
The Crypto ISAC is a member-driven, not-for-profit organization that works together to curb malicious actors, address vulnerabilities, share intelligence, and move security forward to protect the crypto ecosystem. We are founded by leading crypto organizations and designed for cryptosecurity experts to address the security and trust challenges that face crypto today and shape the crypto ecosystem of tomorrow.