Abstract—Indoor localization is a key application of Wireless Sensor Networks (WSNs) for tracking objects, where secure communication is essential to protect sensitive location data. This paper proposes a lightweight, layered security scheme for indoor localization systems deployed on resource constrained WSN devices. The scheme integrates multiple cryptographic algorithms: Ascon-Authenticated Encryption with Associated Data (AEAD) for authenticated encryption, X25519 for key exchange, ED25519 digital signatures over a SHA-256 hash of the encrypted payload to ensure strong source authentication, data provenance, and non-repudiation of localization data and timestamp-based replay protection. Raspberry Pi devices serve as Anchor (AN) and Unknown Nodes (UN), where AN transmits encrypted data containing estimated position parameters, including Received Signal Strength Indicator (RSSI) and Pathloss Exponent (PLE) values. UN then decrypt data from the three nearest AN. Experimental results show the system requires only 17.82 ms processing time at AN and 6.48 ms at UN using Raspberry Pi 3B devices and using Wi-Fi File Transmission Protocol (FTP) transmission averaging 3.12 ms per packet. This approach provides enhanced security assurance for indoor localization data, outperforming traditional cryptographic combinations methods such as Rivest–Shamir–Adleman (RSA), Advanced Encryption Standard (AES), and Message Digest 5 (MD5) in terms of efficiency and suitability for WSN environments.