Crypto ICO websites and exchanges are booming in the cryptocurrency industry. And a stupendous amount of personal data is floating around too.
That is why there has been an intensified focus on cybersecurity and privacy regulations — like the European Union’s General Data Protection Regulation (GDPR).
Per Forbes, “in SMBs alone, almost 42% of SMBs have experienced a breach in the last 12 months, and with experts noting a new trend toward smaller and more focused attacks, that number is likely to increase.”
Looking at that, there’s a greater need for crypto ICO websites and exchanges to adhere to strict guidelines and protect both the business and the customers.
What is GDPR?
GDPR is an extensive set of regulations intended to safeguard an individual’s personal data.
It applies to any company or organization that deals with the personal data of individuals who are in the European Union.
In the case of crypto ICO websites and exchanges — GDPR regulations are essential to protect the privacy and security of online users and cryptocurrency traders.
Secure handling and processing of personal data is critical
Under the GDPR — crypto ICO websites and exchanges must adhere to certain standards to ensure the secure handling and processing of personal data.
Organizations are required to implement measures to protect the confidentiality, integrity, and availability of data that they process and store.
They must also conduct periodic assessments of their IT systems and services; ensure that they keep up-to-date with the continuously evolving cybersecurity landscape.
In addition, the GDPR requires organizations to have procedures in place for responding to data breach incidents.
They must also provide an easily accessible way for individuals to exercise their GDPR rights.
- the right to be informed,
- the right to access and portability,
- the right to rectification and erasure,
- the right to object,
- the right to restrict processing, and
- the right to data protection by design.
To comply with the GDPR, crypto ICO websites and exchanges must implement certain measures to protect the private information of their customers. For example—
- GDPR for account takeover frauds: Put simply — account takeover fraud is a type of cybercrime where an attacker takes control over a user’s account. For example, gaining access to the user’s credentials such as username and password can then be used to commit identity theft or to access their financial information.
To prevent and protect against account takeover frauds – companies need to implement strong authentication processes such as two-factor authentication and exercise routine account monitoring.
They must also ensure that their systems are secure and follow GDPR regulations to protect user data. Read more about account takeover fraud.
- GDPR for data subject rights request: In accordance with the GDPR, companies need to provide users with the option to request access to the data they have stored about them. That’s when data subject rights request comes into the picture.
As per the provisions — companies must also allow users to request that their data be updated, amended or erased.
Moreover, companies must comply with these requests within a reasonable amount of time and should ensure their systems are secure so that user data is safe from unauthorized access.
- GDPR for KYC (Know Your Customer): To be in compliance with GDPR regulations — companies need to ensure that they use KYC (Know Your Customer) approaches in order to verify the identity of their customers. KYC is a type of customer due diligence process wherein the exchange needs to look into the customer’s identity and the attached documents to prevent fraud or money laundering. Moreover, companies must need to be careful when collecting or storing such customer information.
So, what is the relationship between cybersecurity and GDPR?
The General Data Protection Regulation (GDPR) is a European Union (EU) law that provides individuals with the right to data privacy and security; it seeks to protect personal data from unauthorized or malicious use.
Cybersecurity is the practice of protecting networks, systems, software and data from cyberattacks — it is essential in order to protect data and users’ personal information as defined in the GDPR.
The two concepts are closely related because GDPR seeks to protect users’ personal data, while cybersecurity is needed to secure this data from unauthorized or malicious access.
5 benefits of complying with GDPR for crypto exchanges
- Enhanced data security — complying with GDPR regulations adds layers of stringent security measures. It ensures that crypto exchanges safeguard their user data more securely and provide a safe, secure platform for trading. Moreover, theft or misuse of customer data can be easily prevented.
- Gain more trust — Users pick crypto exchanges after thoroughly understanding their security standards. By adhering to GDPR measures, crypto exchanges can prove that they take their privacy seriously, to not only their customers but also potential ones. This will help to build trust between users and the exchange — leading to higher levels of customer satisfaction.
- More revenue – Complying with necessary regulations opens up the exchange to more customers, and can offer more services. All of this leads to an increase in revenue. Moreover, GDPR also provides an additional layer of protection to crypto exchanges to secure them from potential legal repercussions, thus saving legal costs.
- Improved transparency — GDPR mandates exchanges to be transparent with regard to data collection and handling practices. Meaning, exchanges need to provide clear information to customers about how their data is utilized, what it is used for, and — of course, who it is shared with. This gives users greater control over their data and makes exchanges more accountable. That way it makes the exchange more credible.
- Greater access to European markets — The best part of adhering to GDPR regulations is that exchanges can expand their customer base and access new markets. This could be a lucrative opportunity.
However, it’s important that exchanges understand the complexities of GDPR before they try to enter the European market.
Brief overview: GDPR regulations for crypto ICO websites and exchanges
Crypto ICO websites and exchanges need to comply with the GDPR regulations — implementing appropriate measures — and thereby protect the personal data of their users. Emails, names, addresses and payment information are examples of such data.
Moreover, companies must also clearly communicate how the data is being collected, stored and processed, as well as provide users with the ability to access and update their data.
They need to also execute appropriate technical and organizational measures to safeguard the data from cyberattacks, and they must inform their users in the event of any data breach.
Finally, companies must ensure they have received proper consent from their users in order to collect or process their data.
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