Lausanne-based startup Metaco, which specializes in the safekeeping of digital assets, is teaming up with IT giant IBM. Together, they are raising a new type of defense ring against hackers.
Fintech Metaco has recently started using the security infrastructure of U.S. IT giant IBM for the custody of digital assets, according to a joint announcement released on Thursday. Specifically, the Lausanne-based startup, which says it also serves major banks and exchanges, is using IBM Cloud's confidential computing capabilities to do so.
The two partner firms are thus entering a new terrain chamber.
Highly Vulnerable
Confidential computing is one of the technological beacons of hope, especially in the highly regulated financial sector, which is under increasing attack from cybercriminals. Put simply, it involves not only securing and encrypting stored data but also protecting sensitive information while it is being processed.
With decentralized financial services such as blockchain-based tokens and coins, but also with payment apps and the emerging open banking solutions, new gateways are opening up for hackers. To process data, it must be decrypted and re-encrypted on the Internet; at this stage, those are highly vulnerable to professional attackers. In other words, fintech progress creates a whole new potential threat for customers.
New Look at the Data Cloud
This is where confidential computing comes in. Processing is placed in a secure shell (trusted execution environment) to which only the user can gain access with a key (technical assurance). This approach also raises security in the data cloud to a new level: Whereas previously the cloud provider had to be believed that it would not use the data itself or pass it on to regulators – a sticking point for Swiss banks with a view to the USA, for example – the provider now no longer has access to the data in the cloud.
This is where the new service from Metaco and IBM comes in, which should quickly set a precedent in the crypto-finance sector. «Keep Your Own Key»-encryption from the IT giant's forge allows Metaco's customers to retain sole access to their crypto keys. The advanced security features help them minimize the risk of malicious actors manipulating workflows, viewing confidential data, or gaining access to digital assets.
Key for the Crypto-Safe
To put it in highly simplified terms once again, IBM and the Lausanne-based fintech are securing the key to the crypto-safe, i.e., to the custody solutions that are themselves secured and in which customers' tokens and coins are stored. Against this backdrop, it is of secondary importance whether the crypto wallets are stored in hot, warm, cold, nearline, or frozen storage solutions deep in Alpine bunkers.
According to the announcement, this way not even Metaco and IBM have control over the digital assets. Only the customers or their trustees do.
