Secondary Wallet Security

Security principles and best practices for using secondary wallets with Rise B2B API

Secondary wallets are a critical security practice for API operations. This guide covers the security principles and best practices.

Security Principles

Principle of Least Privilege

Secondary wallets implement the principle of least privilege by:

• Limited scope: Only used for specific API operations
• Minimal permissions: No access to personal or business funds
• Controlled access: Restricted to authorized API endpoints
• Audit trail: All activities are logged and monitored

Defense in Depth

Using secondary wallets creates multiple security layers:

Primary Wallet

• Remains secure and isolated
• No API access or exposure
• Protected from compromise
• Maintains full control

Secondary Wallet

• Limited scope and access
• Dedicated for API operations
• Easy to replace if compromised
• Clear separation of concerns

Security Benefits

Risk Mitigation

• Isolation: API operations isolated from main funds
• Exposure reduction: Limited attack surface
• Quick recovery: Easy to replace compromised wallet
• Damage control: Minimal impact from security incidents

Compliance and Audit

• Clear separation: Business vs. personal transactions
• Audit trails: All API activities are traceable
• Regulatory compliance: Meets separation requirements
• Documentation: Clear purpose and usage records

Security Best Practices

Wallet Management

Access Control

• Limit access to authorized personnel
• Implement role-based permissions
• Regular access reviews
• Secure key storage

Monitoring

• Real-time activity monitoring
• Automated alerts for unusual activity
• Regular security audits
• Transaction pattern analysis

Backup Strategy

• Secure backup procedures
• Multiple secure locations
• Regular backup testing
• Recovery documentation

Incident Response

• Immediate compromise response
• Wallet replacement procedures
• Communication protocols
• Post-incident analysis

Security Checklist

1. Wallet Creation

   Generate new wallet with secure entropy Store private key in secure location Document wallet purpose and scope

2. Access Control

   Implement strict access controls Use secure key management systems Regular access reviews and audits

3. Monitoring Setup

   Configure real-time monitoring Set up automated alerts Establish incident response procedures

4. Documentation

   Document security procedures Maintain incident response plans Regular security training

Security Considerations

Threat Models

Compromised API Credentials:

• Secondary wallet limits exposure
• Easy to replace without affecting main funds
• Clear audit trail for investigation

Malicious API Usage:

• Limited scope prevents widespread damage
• Monitoring detects unusual patterns
• Quick response and recovery procedures

Internal Threats:

• Access controls limit unauthorized use
• Audit trails provide accountability
• Separation reduces insider threat impact

Compliance Requirements

• Regulatory separation: Meets financial regulation requirements
• Audit trails: Provides clear transaction history
• Risk management: Demonstrates security best practices
• Documentation: Supports compliance reporting

Incident Response

Compromise Detection

• Unusual activity: Monitor for unexpected transactions
• Failed authentication: Track authentication failures
• Pattern changes: Detect deviations from normal usage
• Security alerts: Automated monitoring and notifications

Response Procedures

1. Immediate Response

   Disable compromised wallet access Notify security team immediately Document incident details

2. Investigation

   Analyze compromise scope and impact Review audit logs and monitoring data Identify root cause and vulnerabilities

3. Recovery

   Generate new secondary wallet Update API configurations Restore secure operations

4. Post-Incident

   Update security procedures Conduct team training Implement additional safeguards

• Document purpose: Clearly label this wallet for API operations only

Security Measures

• Separate storage: Store private key separately from primary wallet
• Backup securely: Create secure backups of the private key
• Access control: Limit access to authorized personnel only
• Regular audits: Review wallet activity and access logs

Operational Guidelines

• Dedicated use: Use exclusively for API operations
• No personal transactions: Keep separate from personal crypto activities
• Clear labeling: Mark all transactions as API-related
• Documentation: Maintain clear records of wallet purpose and usage

Recovery Procedures

If Wallet is Compromised

1. Immediate Actions

   Stop all API operations immediately

2. Assess Damage

   Review recent transactions

3. Create New Wallet

   Generate replacement wallet

4. Update Configuration

   Update environment variables

5. Resume Operations

   Test with new wallet