How a self-hosted crypto trading bot keeps your exchange API keys and funds safe: trade-only permissions, local key storage, and why there is no vendor database to breach.
Self-custody is the core of how TradeArmor is built. The questions below cover how exchange API keys work, why a trade-only permission means a bot cannot move your coins, and why a self-hosted bot removes the breach risk that comes with storing keys in someone else's cloud.
If you want the deeper write-up, see TradeArmor vs 3Commas on why cloud key storage is the weak point, and our blog on whether a trading bot can withdraw your funds.
A bot can only do what its exchange API key permits. If the key has trade permission but not withdrawal permission, it cannot move your coins off the exchange, only place buy and sell orders. TradeArmor only ever needs trade permission, so even a worst case cannot withdraw your funds.
No. TradeArmor only needs trade permission. You should never grant a trading bot withdrawal access, and TradeArmor is built so it never asks for it.
On your own machine. Because TradeArmor is self-hosted, your keys live in a local config file on the hardware you run it on. They are never transmitted to any TradeArmor server.
There is no central TradeArmor database holding customer API keys, because the keys never leave your machine. A breach of a vendor's servers cannot expose keys the vendor never stores. Your attack surface is your own machine, which you control.
For key custody, yes. A cloud or SaaS bot stores your API keys on its servers so it can trade for you, which makes those servers a target. A self-hosted bot keeps keys on your hardware, so there is no shared vendor key store to breach.
Enable trade permission and leave withdrawal permission off. Where your exchange supports it, you can also restrict the key to specific IP addresses for extra safety. TradeArmor functions fully with a trade-only key.
No. Keys stay in your local config and are only ever used to talk to your exchange directly from your machine. TradeArmor does not receive, store, or proxy your keys.
In 2022, the cloud bot 3Commas confirmed that user API keys were exposed in a breach. It is a clear example of the risk of storing exchange keys on a third-party server. A self-hosted bot avoids that class of risk by keeping keys local.
Yes. Because the bot uses an exchange API key, you can delete or disable that key in your exchange account at any time and the bot loses access immediately. With a self-hosted bot you also control the software itself.
It means you keep control of both your funds and your keys. Your coins stay in your own exchange account, your API keys stay on your own machine, and no third party holds either. TradeArmor is built around this model.
Running 24/7 is normal for an automated bot and does not by itself add custody risk, since a trade-only key cannot withdraw funds. Use a stable machine (a Mac mini, a Raspberry Pi, or a VPS), keep it updated, and restrict the API key to trade permission.
No. It only uses the API key you provide, scoped to the account and permissions you set on the exchange. It cannot reach other accounts or wallets.