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 a member of the Financial Industry Regulatory Authority and Securities Investor Protection Corporation (FINRA/SIPC). Additional information about Ohanae Securities LLC is available on BrokerCheck.
Ohanae Securities LLC is currently in discussions with FINRA regarding the potential expansion of its business lines, which may include custody and related services for crypto asset securities. Any statements regarding the capabilities or services of Ohanae Securities LLC are subject to regulatory approval, and there can be no assurance that such approvals will be obtained.
Ohanae Securities LLC intends to operate in a manner that addresses the unique characteristics of crypto asset securities, including maintaining robust policies and procedures for custody, safeguarding of private keys, and evaluation of distributed ledger technology. The firm’s approach is designed to support crypto asset securities that may not efficiently operate within the traditional National Market System (NMS). Subject to applicable regulatory approvals, Ohanae Securities LLC may expand its activities to include additional services that may be conducted in a dealer-principal capacity, with the objective of protecting investors and maintaining market integrity.