Intent
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This handbook outlines the secure and efficient management of cryptocurrency transactions between a centralised exchange (CEX) wallet, a decentralised exchange (DEX) wallet (Safe wallet recommended), and third-party wallets where custody is relinquished. Key security protocols are enforced, including multi-signature approvals for transactions exceeding $5,000.
“By following this simple approach we found our transfer of crypto much more within our control” – Frederic Decontra
Objectives:
- Maintain security and mitigate risks in crypto transfers
- Ensure compliance with internal approval mechanisms
- Establish a clear transactional workflow from CEX to DEX to external wallets
- Implement best practices for custodial asset management
Transaction Flow Overview:
- Funding the Centralised Exchange (CEX) Wallet
- Only approved team members have access to CEX funds
- Deposits must be logged in the internal ledger
- Fiat-to-crypto conversions are approved by the finance team
- Transferring Funds from CEX to DEX (Safe Wallet)
- Ensure wallet address accuracy before transferring
- Transactions exceeding $5,000 require 2 out of 3 multi-signature approvals
- Upon transfer completion, update transaction logs and reconcile balances
- Moving Crypto to Third-Party Wallets
- External wallet addresses must be pre-approved and whitelisted
- Transfers beyond $5,000 require secondary authorisation
- Once funds are sent, control over the asset is relinquished
- Document transaction ID, recipient details, and purpose of transfer
Security Measures
Access Control
- Only designated personnel have access to wallets
- Enforce role-based access control (RBAC) for wallet operations
- Implement mandatory multi-signature authorisation for large transactions
Multi-Signature Protocol
- Transactions exceeding $5,000 require 2 out of 3 approvals from designated signers
- All approvals must be recorded in an internal log
- If a signer is unavailable, a backup signer may be used with explicit approval
Whitelisting & Address Verification
- Maintain a whitelist of pre-approved recipient addresses
- Any new third-party wallet must undergo a security review
- Cross-check wallet addresses against official documentation before transfers
Logging & Monitoring
- Maintain detailed logs of all transactions, including sender, recipient, amount, and approval signatures
- Implement automated alerts for unauthorised or large transactions
- Regularly review transactions and reconcile balances
Incident Response & Recovery
- Establish a protocol for handling unauthorised transactions
- Maintain a cold storage backup of critical assets
- Implement a contingency plan for lost access or compromised keys
Reporting
- Weekly Transaction Reports
- Summary of transfers between CEX, DEX, and third-party wallets
- Approval logs for multi-signature transactions
- Any anomalies or flagged transactions
- Quarterly Security Review
- Review and update approved wallet addresses
- Evaluate multi-signature compliance adherence
- Conduct penetration testing on wallet security
Roles & Responsibilities
| Role | Responsibilities |
| Finance Team | Approves funding and oversees transaction reconciliation. |
| Security Officer | Monitors transactions and investigates anomalies. |
| Multi-Signature Signers | Authorise large transfers and enforce approval policies. |
Conclusion
This handbook serves as a guide for securely managing crypto transactions while minimising risk exposure. Following these protocols ensures operational efficiency and security best practices.