When you hear FIPS 140-2, a U.S. government security standard for cryptographic modules. Also known as Federal Information Processing Standard 140-2, it’s the baseline for anything handling sensitive crypto data—wallets, exchanges, cold storage systems. If a company claims to be secure but doesn’t mention FIPS 140-2, they’re probably not telling the whole story.
FIPS 140-2 isn’t just a checklist—it’s a requirement for exchanges that handle over $1 million in daily trades. It governs how private keys are stored, encrypted, and accessed. Without it, your funds are vulnerable to insider threats, physical breaches, or software exploits. Companies like Coinbase and Kraken use FIPS 140-2 certified Hardware Security Modules (HSMs), physical devices designed to securely generate and store cryptographic keys. Also known as crypto HSMs, these are the armored vaults of the crypto world. You won’t find them in your phone app—but you’ll find them running behind the scenes where real money is kept.
FIPS 140-2 also ties into compliance. Regulators in the U.S., UK, and EU expect crypto firms to meet this standard. If you’re a business, skipping it could mean fines, license revocation, or being blocked from banking partners. Even if you’re just a user, knowing whether your exchange uses FIPS 140-2 helps you spot the serious players from the fly-by-night outfits. It’s not about marketing—it’s about whether your keys are locked behind military-grade hardware.
There’s a newer version, FIPS 140-3, but most crypto firms still rely on 140-2 because it’s proven, widely accepted, and easier to audit. The transition is slow—not because it’s outdated, but because replacing certified hardware is expensive and risky. What you’ll find in these posts are real-world examples: how cloud HSMs use FIPS 140-2 to protect exchange assets, why some platforms avoid it (and what that means for you), and how compliance failures lead to hacks.
These aren’t theoretical discussions. They’re case studies from exchanges that got it right—and those that didn’t. Whether you’re managing crypto funds, evaluating platforms, or just trying to understand why security matters, this collection gives you the facts without the fluff.
HSM key management is the backbone of cryptocurrency exchange security. Learn how hardware security modules protect private keys, prevent hacks, and ensure regulatory compliance with real-world examples from Kraken, Coinbase, and more.