Information Security Compliance and the Blockchain

Over the years, various information security standards have been published across a multitude of industries to protect consumers, organizations, and their assets from breaches and cyberattacks. Complying with regulations and frameworks has become the cost of entry. This is becoming increasingly true for cryptocurrency and blockchain-based companies as well.

Risk Management & Compliance

The concept of information security and compliance was commonly viewed as another expense for organizations up until a short time ago. Along with the rapid adoption of technology comes a proliferation of security frameworks and compliance laws.

Effectively managing risk and compliance not only enables organizations to mitigate risk and deliver the necessary assurance, but it also generates revenue by creating more efficient processes and opens the door to markets and clients.

Who Does it Apply to?

With companies going digital, information security and compliance applies to businesses, big or small: industries such as healthcare, telecommunication, banking, insurance companies, third-party vendors, and now blockchain-focused companies

What Does it Aim to Protect?

The aim of information security compliance is to protect sensitive/ critical information such as:

• Financial Information of customers

• Personally Identifiable Information

• Personal Health Information

• Internet Protocol (IP) Addresses

• Critical Information Infrastructure, etc.

Compliance & the Blockchain

Over the past decade, cryptocurrency has been subject to much scrutiny, but it is withstanding the test of time. Blockchain technology has become popular for its real-time analysis, providing single-source credibility in a ledger system spread among multiple parties, giving new meaning to the privacy of its participants while being secure and transparent. As blockchain technology and cryptocurrency become more commonly accepted, organizations have started to recognize the potential for growth linked to information security compliance.

Compliance for blockchain businesses will not only demonstrate their dedication towards the security and privacy of their data but will also give them global recognition and the opportunity to attract new clientele. As of now, mandatory compliance is applicable where cryptocurrency is regulated and the company in question is authorized for transmission of fiat money, generally falling under state and federal laws.

Multiple standards have incorporated information security best practices for blockchain companies and marketplaces, but the Cryptocurrency Security Standard (CCSS) is the most popular. Other frameworks include PCI DSS, SOC 2, ISO 27001, 27701, and NIST.

The Cryptocurrency Security Standard (CCSS): - provides a set of best practices for all information systems that are tied to cryptocurrency such as exchanges, web applications, storage solutions, etc. It is not a standalone standard that caters to the overall security requirements of an organization, so it should always be accompanied by additional security processes. CCSS also works well in conjunction with other information security standards i.e., ISO 27001:2013, or SOC 2.

The CCSS consists of 10 security aspects each one reflective of a single piece of the information system. The value of these security aspects corresponds to the information systems' overall score. This score then maps to 3 levels of security, with level 1 being the lowest while still offering strong security measures, whereas level III is made up of more comprehensive security controls.

The cryptocurrency security standard is applicable to all the information systems involved with cryptocurrency; these systems are not limited to but can consist of the following:

• Storage Solutions

• Cryptocurrency Marketplace

• Payment Processors

• Exchanges, etc.

PCI DSS: - The PCI Security Standard Council developed the Payment Card Industry Data Security Standard (PCI DSS) to protect and safeguard all the transactions that involve Credit/ Debit Cards. It applies to the whole transaction flow, from the technology used to gather the data, to the technology used for its transmission through the system, and all the processing points.

Compliance with PCI DSS is a cherry on top for blockchain companies; the standard provides guidelines and best security practices for the entire transaction flow, granting additional credibility.

ISO 27001, 27701: - ISO 27001 is the longest-standing and most comprehensive security standard that provides a wide variety of best practices for Information Security Management Systems (ISMS). ISO 27001 is a risk-based standard that applies to every integral part of an information system across the whole organization. ISO 27701 was introduced to address the privacy aspect and serves as an expansion to ISO 27001.

SOC 2: - SOC 2 has been around for quite some time now, it is an integral part of the financial industry. It is based on five trust service principles availability, security, integrity, processing, confidentiality, and privacy. It ensures that vendors/service providers securely manage your organization's data and protects the interests of your business.

NIST: - NIST offers a range of cybersecurity standards for various domains and industries. The cybersecurity framework published by NIST gives detailed guidelines for identifying, protecting, responding, and recovering from a cyber security incident. Compliance with this standard will increase the confidence and trust in crypto and blockchain-based companies.

The Compliance Process

The compliance process for CCSS is much like that of the existing security standards. It involves completing a gap assessment, defining the CCSS compliance level, performing a risk assessment, vulnerability assessment, application security analysis (dynamic/ static), etc. Once the applicable controls are implemented and tested, it is only a matter of verification of these controls by the standard authority. It does require compliance managers and professionals to ensure a smooth compliance journey. There may be many automated compliance management solutions on the market, but it is completely up to the compliance manager to opt for either a manual or automated management solution. Both automated and manual compliance management schemes come with a set of pros and cons.

It may seem that only CCSS is applicable to crypto companies but applying a security standard limited to crypto and related technologies may not be enough to protect the whole organization. To ensure a strong information security posture, blockchain companies should be compliant with the related security standards on top of the CCSS.

How We Can Help

We're StandardFusion, a SaaS-based governance, risk management, and compliance software (GRC). We build enterprise-capable software for tech-focused SMBs to build and manage their compliance and information security programs that adapts to the users' organization and workflow. Our software allows teams to perform all risk management, compliance, audit, policy, and vendor-related activities in a single environment and automates numerous processes to deliver an intuitive management experience, timely insights and on-demand reports. Take your information security and compliance program to the next level and sign up for your demo today!