Ping Exchange’s hybrid cold storage redefines standards for crypto exchange custody Ping Exchange’s hybrid cold storage redefines standards for crypto exchange custody
Core Corner Issue 2: Exploring how Ping Exchange handles custody of user assets.
4 min read
Updated: Feb. 22, 2024 at 10:06 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The launch of Ping Exchange signals a potential new stage in digital assets trading. The hybrid platform merges robust security protocols with user-focused asset control, setting a high bar for how exchanges should safeguard user assets. Ping’s standout feature is an unconventional model using a hybrid custodial cold storage to redefine crypto exchange security.
Ping leverages the unique CorePass ID application for streamlined user authentication. Traditional username and password vulnerabilities and cumbersome two-factor authentication (2FA) methods are gone. Instead, CorePass utilizes blockchain-secured identity information, rapid QR code scanning, and Core Blockchain encryption for secure, decentralized login and withdrawals.
Furthermore, while assets deposited onto the platform are placed into Ping’s custody, withdrawal of any assets remains tied to the user’s CorePass ID. Ping cannot withdraw deposited funds without authorization from the user, only allowing trading of assets within the exchange. This streamlined, self-custodial approach places an unprecedented level of access control into users’ hands, merging the benefits of DeFi and CeFi into a new opportunity for users.
So much exchange-focused content references the failures of FTX, Celsius, BlockFi, etc., while claiming to “do better” by offering more secure custody methodologies and promising not to comingle funds. Proof-of-reserve attestations are a fantastic first step; however, Ping’s model puts a flag in the ground in a different, much more substantial way.
With Ping, the CoDeTech team is offering a way to trade digital assets in an exchange environment without signing away the rights to your assets or your identity. Using CorePass, you, the user, remain in control of the data attached to your KYC verification and can revoke it from the exchange at any time. Further, the assets you deposit can be traded across any of the supported trading pairs with other users through a standard exchange order book. Yet, the exchange cannot withdraw your funds without your permission. While not impossible, an FTX scenario would be much more complex with Ping when compared to many traditional exchanges.
In order to facilitate trades Ping has the ability to swap assets between users. Ping also is required to retain the ability to freeze assets to be compliant with AML/KYC regulations. Like traditional exchanges, when it creates the deposit wallet it retains the associated private keys. However, these keys are then required to do anything with deposited funds not already approved by the user.
I’ve often touted that FTX wasn’t a crypto problem but a people problem. Many exchanges don’t rely enough on blockchain technology for their day-to-day operation. I’m so excited to see products like Ping come to market, which put blockchain verification and validation at its core.
Balancing Speed with Uncompromising Security
Moreover, Ping’s focus on cold storage is a cornerstone of its security framework. While many centralized exchanges rely on a less secure mix of hot and cold wallets, Ping’s air-gapped CorePass ID wallets isolate crypto holdings. CorePass ID allows for offline signing through QR codes, creating an air-gapped approach to custody. This strategy significantly reduces the surface area for hackers, minimizing the risk of costly breaches.
The meticulous offline transaction creation and signing process on these air-gapped devices demonstrates Ping’s commitment to safeguarding user funds. Moreover, integrating the ICAN standard with crypto wallets helps prevent sending and receiving errors while supporting various blockchains through network prefixes.
Despite this uncompromising stance on security, Ping also offers exceptional transaction speeds, particularly on the Core Blockchain, with confirmation times as low as a few seconds. This speed comes without sacrificing security. Additionally, near-instant withdrawal processing, typically achievable in under a minute, aligns with Ping Exchange’s pledge to enhance the user experience.
Innovation in Compliance
Ping’s technology also improves transaction security and compliance standards through its automated Know Your Customer (KYC) process. As mentioned in Core Corner Issue 1, CorePass ID allows users to complete a KYC process for their wallet and then essentially sell this data to any third parties, such as Ping, at a later date. This puts the power back in the hands of the user, giving them greater control over their data and who has access.
Ping aligns document submission with a tiered access system to streamline the process further, granting users personalized permissions appropriate to their verification level. This approach simplifies compliance with global regulations such as GDPR and CCPA, enhancing the overall security posture of the platform. Ping’s approach to compliance aims to be accepted as ‘best standard’ by regulators, according to people familiar with the matter.
More Than Just an Exchange
Beyond these novel custody methodologies, Ping Exchange offers real-time notifications, an AntiBot trading system, and multi-language support to cater to a wide spectrum of users, promoting broader inclusion.
While this innovative exchange showcases many groundbreaking features, it’s essential to exercise caution, as with any new platform. Time will ultimately determine its ability to deliver long-term stability and attract a significant user base. Nevertheless, with its innovative solutions to common exchange vulnerabilities, Ping Exchange warrants consideration from anyone seeking a new trading platform offering security and convenience.
In its first month of trading, it has processed volumes comparable to the top 200 DeFi platforms from CryptoSlate analysis. Further, thus far, it has done so without market makers adding liquidity. Instead, all trading through the platform has been peer-to-peer among the nascent Core Blockchain community.
Ping provides unparalleled access to these assets as the world’s first exchange to feature markets for Core Coin (XCB) and Core Token (CTN). Ping users enjoy unique trading opportunities while at the forefront of Core Blockchain developments. Other assets such as Ethereum, Bitcoin, Litecoin, and USDC are also actively tradeable.
The digital assets world is one of perpetual innovation. Ping Exchange’s novel approach to custody, compliance, and user experience could shape the future of exchanges and elevate the industry’s security standards.
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Author 
Liam 'Akiba' Wright
Also known as "Akiba," Liam Wright is a reporter, podcast producer, and Editor-in-Chief at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
