Introduction
In the ever-evolving world of finance, the digitization and tokenization of assets and securities have garnered significant attention. The CEO of BlackRock, Larry Fink, recently acknowledged the potential of asset tokenization to revolutionize the finance industry. While embracing the benefits of blockchain technology, Fink also emphasized the diminishing need for traditional custodians. This blog explores how Ohanae's self-sovereign identity and custody technology provide robust security measures for digital asset securities on the Ohanae OTC Market Platform ("Ohanae Platform").
Self-Sovereign Identity: Passwordless Login
At the core of Ohanae's platform lies the Ohanae ID, which serves as a self-sovereign identity for verified users. When accessing the Ohanae Platform, users utilize their Ohanae ID, linked to their unique username. This secure and user-friendly approach enables individuals to log in conveniently and securely without the need for a username and password, ensuring their digital presence on the platform.
Digital Asset Securities Account (DASA) ID: Enchanced Identification
To further strengthen identification, Ohanae incorporates the concept of a Digital Asset Securities Account (DASA) ID. Unlike the Ohanae ID, the DASA ID employs a numerical identifier. When users sign up for a DASA, their Ohanae ID is linked to their DASA ID, creating a secure relationship between the two. A dedicated table on the Ohanae Platform stores this association, ensuring seamless access to the user's digital asset securities (equity tokens) and deposit coins (Ohanae Coins) information stored on the Ohanae Blockchain.
Securing Private Keys: The Key to Transaction Integrity
Ohanae prioritizes the protection of users' private keys, a crucial component for conducting secure transactions on the Ohanae Blockchain. When users activate their Ohanae ID account, they download the Ohanae app from trusted sources such as the Apple App Store, Google Play Store, or Windows Store. The app is safeguarded by a user-defined passphrase, enhancing the overall security of the user's private key.
Passphrase Recovery: Ensuring Access in Case of Loss
In the event that a user forgets their passphrase, Ohanae offers a Passphrase Recovery feature to facilitate its retrieval. When a new user logs into the Ohanae app for the first time using a system-generated One-Time-Password (OTP), the app prompts them to input their personal information and create a new passphrase. This process allows for automatic passphrase recovery, ensuring that users can regain access to their accounts if needed.
Encryption and Cloud Storage: Balancing Security and Convenience
Ohanae employs state-of-the-art encryption techniques to safeguard users' private keys. For security best practices, the Ohanae app generates a private key on the user's device if one is not already present. The app then encrypts the private key, and the encrypted version is securely uploaded to the Ohanae Platform for cloud storage and synchronization.
Secure Transaction Signing: Verifying User Intent
During an online session, the Ohanae app decrypts the encrypted private key within a secure environment. The decrypted private key is securely transmitted to the user's browser for transaction signing. This process ensures that all transactions conducted on the blockchain are authorized and performed with the user's knowledge and consent, mitigating the risk of unauthorized transfers.
Ohanae's Approach to Custody: Compliance and Security
While Ohanae does not store private keys in plain text, it possesses the capability to generate passphrases to decrypt private keys under management supervision, complying with regulatory standards such as SEC Rule 15c3-3. This approach ensures both security and regulatory compliance, further enhancing user trust in the Ohanae custody solution.
Confidence. That's Ohanae.
As the financial industry continues to explore the potential of tokenization, ensuring the security of digital asset securities and deposit coins becomes paramount. Ohanae's robust self-sovereign identity and custody solution offer users passwordless login, secure encryption and storage of private keys, and seamless transaction signing on the blockchain. By implementing these innovative measures, Ohanae strengthens security and facilitates the widespread adoption of digital asset securities in the evolving landscape of the OTC securities markets.
Disclaimer
Ohanae Securities LLC is a subsidiary of Ohanae, Inc. and member of FINRA/SIPC. Additional information about Ohanae Securities LLC can be found on BrokerCheck. Ohanae Securities LLC is in discussions with FINRA about exploring the expansion of business lines for the broker/dealer. Any statements regarding abilities of Ohanae Securities LLC are subject to FINRA approval and there are no guarantees FINRA will approve the broker/dealer’s expansion.
Ohanae Securities is seeking approval to be a special purpose broker-dealer that is performing the full set of broker-dealer functions with respect to digital asset securities – including maintaining custody of these assets – in a manner that addresses the unique attributes of digital asset securities and minimizes risk to investors and other market participants. If approved, Ohanae Securities will limit its business to digital asset securities to isolate risk and having policies and procedures to, among other things, assess a given digital asset security’s distributed ledger technology and protect the private keys necessary to transfer the digital asset security.