The collapse of the cryptocurrency exchange FTX has spurred countless discussions on how to best manage and protect one’s digital assets. The misappropriation of billions in customer deposits will force regulatory bodies to act, and online discussions about the importance of digital asset management are increasing. Legacy Suite, an industry leader in digital asset preservation, shares how its solutions can protect users from similar disasters and are purpose-built to protect digital assets like cryptocurrency, NFTs, legal and health directives, and much more.
In early November, a CoinDesk article exposed the balance sheet of FTX’s sister company Alameda Research, showing that it held roughly $14.6 billion in FTT — a token issued by FTX. Rumors regarding the comingling of assets and potential solvency issues began to swirl. By the very next week, FTX officially filed for bankruptcy, contradicting previous statements by FTX CEO Sam Bankman-Fried, who assured the press that the firm was “fine.”
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Since then, formal investigations have begun, conducted by the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Securities Commission of the Bahamas, and the Financial Crimes Investigation Branch.
Holding assets within a centralized exchange has significant risks. A common alternative is to utilize non-custodial wallets (warm or cold wallets), as this method is considered the most secure place to store cryptocurrency assets among crypto enthusiasts. This method, however, is also risky, as users cannot reset passwords or call customer support to recover lost secret phrases. Users also can be susceptible to malware, viruses, and social engineering attacks from scammers seeking to drain assets.
For any digital asset holder, the significance of operational security cannot be understated. Using physical notebooks for security keys and limiting password-sharing is essential to security optimization. Asset holders should also leverage multiple wallets and exchanges to avoid storing large quantities of cryptocurrency in one location and to spread their total risk. It’s considered a best practice not to store cryptocurrencies on centralized exchanges for long periods, and owners should opt to trade pairs with high liquidity to make cashing out easier.
Legacy Suite supports hardware and cold wallets and now offers a one-click backup “panic” feature called Legacy Lifeline. Legacy Lifeline allows users to pre-authorize asset transfers on their non-custodial wallets and quickly execute smart contracts to avoid instances of digital items being held or frozen on exchanges. With this innovation, users can have peace of mind knowing that their assets are secure, even in a distressing situation such as a hack or security breach.
Cryptocurrency owners can also set pre-approvals via the Legacy Suite Crypto Will feature to retain complete control of their assets that they might have otherwise lost by relying on a hardware wallet’s key.
“We recognized that these features are needed now more than ever to promote the true essence of decentralization and help towards its mass adoption,” said Gordon Bell, founder and president of Legacy Suite. “Before the introduction of our platform, there has never been a simple click-through user interface to perform such complex tasks on blockchain. We aim to utilize smart contracts to their full potential and enhance digital asset protection capabilities.”
Legacy Suite is setting a new mark in the domain of programmable smart contracts by enabling a digital inheritance and recovery solution owned and operated by the assets’ owner. While disasters such as the FTX collapse may be impossible to predict, users must be proactive due to the uncertainty and volatility of the cryptocurrency space — especially when the preservation of their digital life can be so simple.
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