It has been a tough year for the crypto industry: yet to end, 2022 is already considered the biggest year in terms of crypto attacks. Up to this point, $3 billion has been stolen in cryptocurrency wallet heists. Exploiting wallet vulnerabilities, hackers gain access to accounts and withdraw funds easily. In most cases, hackers gain access to wallets via apps and wallets that use legacy authentication methods. In other recent cases, hackers were able to transfer over $500 millions by gaining access to a few admin accounts that operate transfers between different blockchains.

Eliminating common attack vectors such as passwords, one-time passwords, emails, and SMS reduces the vulnerability of wallets. By not requiring passwords as part of the authentication process, users are less likely to be scammed.

In this blog, we'll discuss the benefits of bringing passwordless authentication methods to the crypto industry.

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What is passwordless authentication?

Passwords are hackers’ favorite attack vector for a simple reason: they are not secure. 8 in 10 company data breaches are password related. And even though most people are more and more sensitive to security-related issues, a significant part of them still won’t change their password after a phishing attack. Furthermore, because we’re required to remember so many passwords on a daily basis, people often choose risky methods to store their passwords: 32% save passwords in browsers, and 26% save passwords in spreadsheets.

Traditional password authentication protocols use centralized intermediaries that maintain a database of credentials to prove users’ identity, putting customers and companies at risk. Passwordless authentication is a possession-based authentication method that doesn’t require a password and adds an extra layer of security. Types of passwordless authentication methods include magic links, one-time passwords (OTP), and biometric authentication.

When it comes to crypto companies, the need to verify users’ identities, combined with the need to comply with KYC and other regulations, makes face the most suitable authentication method.

Here's why crypto exchanges should implement face as an authentication method

Crypto exchanges face numerous challenges these days. The competition is fierce. On the other hand, there are a lot of regulatory requirements and trust needs to be built. Face biometrics make it easier for crypto companies to implement KYC procedures and, at the same time, provide users with a seamless, private, and secure authentication process. Easy onboarding and authentication are key in a competitive market.

To solve these problems, YooniK built a developer-first API that speeds up onboarding and authentication. Users can authenticate using their mobile phone's camera and confirm that the person in front of the camera is the same as the picture on their ID card. Certified intelligent anti-spoofing technology prevents presentation attacks and distinguishes between a live person and, let's say, a printed picture or a video on a tablet. You can integrate it easily into any of your applications and you can scale as you grow. YooniK is GDPR compliant and ranked TOP5 in EU+US by independent benchmark earlier this year.

Key takeaways

Face biometric authentication processes enable crypto companies to:  

• Keep up with compliance requirements.
• Create a higher level of security in accessing and negotiating with crypto assets.
• Increase data privacy levels, enabling users to decide when, how, and who will see their personal information.

What now?

Download our ebook to get further information on biometric authentication.