IT Security Company Partners With Exchanges and Wallets to Block Usage of Stolen Crypto

A Singapore-based IT security company offers a potential blockchain-based solution to help protect individual crypto users and block the use of stolen cryptocurrencies on crypto wallets and exchanges.

Sentinel Protocol allows security experts and organizations to collect, share and analyse comprehensive threat intelligence data on its blockchain platform. The information about hacks, scams, and fraud is stored on the decentralized Threat Reputation Database (TRDB).

As previously reported by Cointelegraph, hackers have recently stolen $30 million worth of cryptocurrencies from Bithumb, South Korea's leading cryptocurrency exchange.

Patrick Kim, the founder of Sentinel Protocol, who previously worked at F5 Networks and Palo Alto Networks, says he himself was hacked two years ago when he lost 7,218 Ethereum due to a vulnerability in the geth-mist wallet. As the company’s website states, he “investigated the attack vectors and informed the geth-mist development team, who quickly applied security patches.”

As a hacking victim, Patrick was concerned that, as he said, at the expense of freedom of decentralization, the burden of proof is imposed on an individual when hacking happens. “The ideology of decentralization is central to both cryptocurrency and the internet, but it is impossible to say that blockchain implements perfect autonomy,” he wrote in the company’s white paper. “Autonomy in openness is subject to individual responsibility. Decentralization is not a magical solution to all problems … the ideology of decentralization must develop a philosophy of security.”

Building a security alliance

The company says that the TRDB data is provided to crypto exchanges, wallets and payment services to allow their users to transact safely without unintentionally aiding criminal activity. Any address or sub-address associated with attackers could be automatically identified and flagged, helping exchanges and wallets block the movement of stolen cryptocurrencies.

According to Sentinel Protocol, the more exchanges, wallets and payment services join the partner alliance, the more difficult it would be to spend stolen cryptocurrencies. The company has already announced a partnership with Bibox, a centralized exchange, as well as several new collaborations with decentralized exchanges including IDEX, DDEX, and DEx.top.

“On top of preventing the sale of stolen cryptocurrencies anywhere and thus disincentivizing malicious behavior, properly setting up proactive security measures is equally important,” said Sentinel Protocol’s Chief Evangelist John Kirch. “While we continue to form partnerships, we will provide preventive solutions to raise the security bar and help the community protect their assets.”

Three aspects of safety

According to the company, Sentinel Protocol’s platform hinges on three key aspects — a Sentinel Portal, a go-to-place for crypto community to report hackings and get the needed help from the security experts; a S-wallet powered by a machine learning that assesses future threats; and a distributed malware analysis sandbox that verifies unknown threats in an virtual environment.

On June 25 the company announced that Sentinel Portal will be pre-released to previously selected Pre-Sentinels Cybersecurity Experts on June 27, 2018. These experts will collect and verify incident information.

Starting from July, the experts will work directly on the TRDB as well as S-Wallet Lite, a solution for initial coin offering (ICO) investors to prevent scams.

The distributed sandboxing is designed to keep security a step ahead of hackers at all times. This involves testing for suspicious and unidentified files or links. It augments threat tests and simulations, runs virtual machines on decentralized nodes, and generates incentivized threat vectors.

The company plans to make the Sentinel Portal and S-Wallet Lite linked with the TRDB available to all users in August.