In this article, you will learn:
- What you need to know before choosing a platform to buy bitcoins in France.
- The security measures that the platform puts in place.
- The elements you must look out for as a client to secure your funds.
You want to invest in cryptocurrencies but you still have questions about the security of trading platforms. How do these platforms ensure your security? Are your virtual currency transactions sufficiently secure? We invite you to better understand what we implement at Paymium.
What Paymium Does to Ensure the Security of Your Funds
At Paymium, the security of funds is our highest priority. To achieve this, we use several tools and implement various strategies.
Complying with the recommendations of the Autorité des Marchés Financiers
This is the most important thing before buying. Learn about the platform and verify several pieces of information that can assure you of its security. First of all, pay attention to the legality of the platform. Register on a platform registered with the AMF, the Autorité des Marchés Financiers. This is the case for Paymium, which was the first platform to be registered there in March 2021.
The Autorité des Marchés Financiers (AMF) is an independent public authority whose mission is to ensure the protection of savings invested in financial products, investor information, and the proper functioning of markets. It also ensures compliance with laws and protects savers.
Finally, choosing a platform that has its headquarters in your country of residence is a real asset. In France, the French tax system requires, in addition to the annual declaration of capital gains, the declaration of all digital asset accounts opened, held, used, or closed during the year, even when the account balance is empty.
However, clients of companies domiciled in France are exempt from this obligation. By using Paymium's services, you do not add to your tax return burden. Of course, all taxable operations during the year must be attached to your declaration. That said, certain French platforms provide a complete and easy export of all transaction, deposit, and withdrawal histories for this purpose.
Paymium fulfills all these criteria. Since our creation in 2011, we have implemented tools adapted to the specificities of French taxation and regulations.
Storing liquidities in cold storage, in a “cold wallet”
Exchange platforms like Paymium manage their users' funds by using a combination of two types of wallets. On one side, what is called a "hot wallet" (portefeuille chaud) and on the other, a "cold wallet" (portefeuille froid).
The distinctive feature of a hot wallet is that it is directly connected to the internet, which facilitates trades. When you make a transfer of a currency onto a platform, for example in dollars, and you directly buy a digital currency, the funds are automatically transferred to a hot wallet so they can be traded. However, this type of purse, by being directly connected to the Internet, presents an increased vulnerability to potential attacks from hackers.
This is why platforms use cold wallets in order to maximize the security of their users. The latter are not and have never been connected to the internet and prevent computer piracy or hacking. Indeed, if the wallet is not connected to the internet, it is strictly impossible for a hacker to access it; your funds are therefore safe there.
At Paymium, 99% of BTC are stored in a cold wallet.
Protection against hackers
The risk of hacking constitutes one of the most important security points for exchange platforms. Therefore, be responsible for your funds and keep in mind that some exchange platforms do not have the same protection means as Paymium.
New hacking techniques are developed every day, and platforms must verify their vulnerability and their security system almost daily. To do this, they run attack simulations to find out their security flaws and then resolve them.
In its history, no hacking attempt has ever led to a theft of funds on Paymium. In order to constantly improve its security, Paymium regularly calls upon independent experts to conduct security audits. These audits allow us to implement ultra-secure protocols to protect our clients' funds, but also their personal data.
This is an important concept within the framework of protection against hacking. At Paymium, we pay particular attention to the protection of our clients' personal data. We have implemented strict procedures and encrypted backups in compliance with the General Data Protection Regulation (GDPR).
We are also accompanied by Ariadnext during our clients' identification procedure, which answers our commitment obligations to combat money laundering and terrorist financing. Ariadnext is a specialized, French, trusted partner that works with recognized financial institutions and public organizations.
In addition, euro funds at Paymium are managed by a European banking partner, thereby facilitating all types of transactions.
What You Can Do to Protect Your Funds
Exchange platforms are obviously the places where you buy your cryptocurrencies. But keep in mind that your funds belong to you and that you are responsible for them.
You can use simple techniques to protect yourself. Here are several solutions to invest in cryptocurrencies autonomously and in total safety.
Two-factor authentication
To reinforce the security of your funds, Paymium strongly recommends that you use a free tool allowing you to secure access to your account. This tool is called two-factor authentication or 2FA. It is an additional step when logging into your wallet.
It consists of sending a time-limited code via SMS, email, or an authentication application that you must enter during each login.
Thanks to this extra security barrier, access to your account becomes almost impossible for hackers. Indeed, in addition to your password, the hacker would have to hack two or even three accounts within a short window of time, which is far beyond the reach of just anyone, to say the least!
Many services exist. We recommend that you download the most well-known ones onto your mobile phone: Google Authenticator or Authy.
Protecting your mailbox
During your registration, in addition to your password, you will have to enter an email address. Select this email address carefully and ensure that it is very well secured.
As with your account on the exchange platform, choose a complex password and implement two-factor authentication.
By securing your mailbox, you secure access to your account and therefore your wallet. This is not a piece of advice to apply solely in the field of cryptocurrencies, but for the totality of your accounts. Securing your mailbox also means protecting a large quantity of your personal data, so keep it in mind.
FAeQ
What is an AMF registration and why is it crucial for a French investor?
Registration with the Autorité des Marchés Financiers (AMF) guarantees that a digital asset platform complies with French regulations regarding transparency, saver protection, and anti-money laundering. Choosing an operator registered in France, like Paymium, which was the first to obtain it in March 2021, offers indispensable legal safety. Moreover, using a platform domiciled in France greatly simplifies taxation, as clients are automatically exempt from the obligation to declare the existence of their foreign accounts each year.
How do platforms protect cryptocurrencies against computer hacking?
Protection relies mainly on partitioning storage infrastructures using two complementary systems. Daily and immediate transactions transit through wallets connected to the Internet, known as "hot wallets". Conversely, the vast majority of reserves in the ecosystem is immediately transferred to cold wallets, which are totally isolated from the network. Because they are never connected to the Internet, these digital vaults make remote access and computer hacking technically impossible for cybercriminals.
What is the difference between a hot wallet and a cold wallet in fund management?
The fundamental difference lies in the exposure to the Internet network and the resulting security level. A hot wallet is a connected interface that offers great fluidity to execute buy and sell orders in real time, but this permanent connection presents a vulnerability to attacks. A cold wallet operates strictly offline and serves as a long-term conservation reserve. At Paymium, 99% of users' bitcoins are kept permanently within these cold and disconnected structures.
How can I secure access to my exchange account at my level?
The security of your capital is a shared responsibility between the platform's technical infrastructure and your own digital habits. The most effective individual protection measure consists of activating two-factor authentication (2FA) via specialized applications like Google Authenticator or Authy. This system generates a unique code renewed every 30 seconds on your smartphone, building a quasi-insurmountable barrier for a hacker, even if the latter managed to discover your main password.
Why does the security of my personal mailbox influence the security of my cryptocurrencies?
Your professional or personal email address constitutes the anchoring point of your digital identity and serves as a gateway for recovering access or validating sensitive operations. If a hacker takes control of your mailbox, they can easily intercept your reset requests and bypass the security measures of your financial accounts. Securing your messaging service with a complex, unique password, and activating the 2FA system there as well, is a critical step to indirectly protect your wallet.
