Appendix 2: Exchange Security Processes

Reading Time: 2 minutes ;  Published: 1 year ago on May 26, 2020

A full review of exchange security processes is recommended to be undertaken before the deployment of the local exchange. However, TotalCrypto advises that the following security recommendations are adhered to if the exchange is deployed.

Levels Of Cash Inventory

The amount of cash required to be held in the exchange depends on the size of the local population being served. However, it’s proposed that a maximum of 5% of the gifted crypto can be converted per day per person. The limited number of exchange cashiers means that not everyone should be able to convert some of their cryptocurrency into cash on any given day.

To start off, cash inventory in the exchange could be as low as 1% of the gifted crypto value e.g. if $100,000 in cryptocurrency was distributed in the case study location, then just $1,000 in local currency could be held in the exchange to begin with. The cash inventory held should be as low as possible to reduce the likelihood of theft. 

Additional Security Processes:

  • The exchange should only hold modest amounts of cash and it should all be held in low denomination coins and notes.
  • The cash should be held in locked heavy duty cash drawers during closing times.
  • Behind the exchange counters workers should be monitored with webcams. This acts as a disincentive for theft and is also for employees own protection as well.
  • Cash drawers should be placed under the exchange counter and it is recommended that this area should be secured by a fingerprint smart lock.
  • Exploding dye packs may also be deployed to act as further disincentives to theft. 
  • It’s advised that cryptocurrency wallets in the exchange should only be credited with a small amount of coins. It is expected that exchange employees will have to request wallet top ups to the teams of participating cryptocurrency projects more than once per day. At the end of the working day, it's advised that any remaining crypto should be sent back to a wallet controlled by the teams of involved crypto projects.
  • It’s recommended that panic buttons are installed under exchange counters.

In event of a robbery it is recommended that local employees are instructed to: 

  1. Give all cash to the robbers without resistance. 
  2. To press the panic alarm to alert the local police.
  3. To allow the robbers to leave and lock the doors.
  4. Deploy exploding dye packs (if utilized) 10 seconds after the front doors have been secured.
  5. Retreat into a secured incubator room and await help.
  6. Once the threat level has decreased the gatekeeper must file a police report and submit webcam evidence.

Next Section – Appendix 3: Incubator Shareholder Incentives