Crypto CEX

Overview

A backend system for a centralized cryptocurrency exchange (CEX), handling user accounts, wallet management, order matching, and secure asset custody. Built with security and scalability as primary concerns.

Core Components

Wallet Management

• Hot Wallets: For immediate withdrawals
• Cold Storage: Secure offline storage
• Address Generation: HD wallet derivation

Trading Engine

• Order Matching: Price-time priority
• Order Types: Market, Limit, Stop-Loss
• Fee Calculation: Maker/Taker fee model

Security

• Multi-signature: Required for large transfers
• Rate Limiting: Protection against abuse
• Audit Logging: Complete transaction trail

Technical Implementation

Wallet Architecture

public class WalletService {
    private final HotWallet hotWallet;
    private final ColdStorage coldStorage;

    public String generateDepositAddress(String userId, Currency currency) {
        // Generate unique deposit address per user
        return hotWallet.deriveAddress(userId, currency);
    }

    public void processWithdrawal(WithdrawalRequest request) {
        if (request.amount() > HOT_WALLET_THRESHOLD) {
            // Queue for cold storage processing
            coldStorage.queueWithdrawal(request);
        } else {
            hotWallet.executeWithdrawal(request);
        }
    }
}

Security Measures

• Hardware Security Modules (HSM) for key storage
• Multi-party computation for signing
• Regular security audits

Challenges Addressed

1. Reorg Handling: Dealing with blockchain reorganizations
2. Double-spend Prevention: Transaction confirmation requirements
3. Hot/Cold Balance: Optimal fund distribution
4. Compliance: KYC/AML integration points

System Design Considerations

• Event sourcing for transaction history
• CQRS for read/write optimization
• Idempotent operations for reliability