27 October 2021
When you initiate Crypto Trading, the first thing that comes to mind is 'security'- about how you would secure your assets. Unfortunately, since the inception of the Digital Era, Crypto exchanges and stakeholders including investors have been vulnerable to everything from security exploits to social engineering frauds. It shouldn’t come as a surprise that the rising popularity of Cryptocurrencies, as well as their contribution to the economy, has attracted the attention of scammers.
Crypto fraud is currently the second most common type of fraud in the United States. While customers have only been utilizing Cryptos as a legitimate method of trade for a few years, it’s worth noting that criminals have made Crypto wallets their favourite playground in a short amount of time. When it comes to Crypto fraud, there are two types to consider.
To begin with, rouge merchants take advantage of the customers by siphoning off a little amount of Cryptocurrency while completing transactions. Second, fraud is performed by criminals through the real exchange of digital assets. This is the same as hacking. The nature of how Cryptocurrencies work is the largest difficulty that Crypto investors are experiencing. There is little that a victim can do if fraud is perpetrated. No one is held responsible because the platforms are decentralized. No one has the power to undo a forged transaction. Because Crypto exchanges employ codes instead of names, all parties involved remain anonymous.
Also Read: Is Leaving Crypto In Exchange Safe?
Even though it is easier to leave your cash on Crypto exchanges, moving funds to your wallet is sometimes impossible, especially when you’re a frequent trader. But, we can’t stop hackers from attempting to hack exchanges. Hence, to protect your funds from being stolen, the best you could do is ensure the best security of your exchange accounts.
Here are 9 security tips that will make it extremely difficult for fraudsters to access your account.
1. Unique and Complicated Password:
Hackers act very sophisticatedly with the tools to target exchange accounts because they may steal your funds and get away with it without leaving a trace of their identity. If you’re still using short passwords without numbers or symbols (@#!~^%*&\), then your account- especially those on Cryptocurrency exchanges are at risk. Why? Because hackers “brute force” their way into your account using special software. In other words, these hackers won’t go easy on you and your account; they will try every possible character combination in the hopes of guessing your account’s password at some time. So, what are the best options for dealing with this? First, make your password long and difficult to guess; a password should at least contain 14 characters or more.
Here’s an example: NIoTndhhSdo$#sJb&nDAboc*sbvwy#@BsKLP^[email protected]%j86YSGV*ff!9037xsh2GDjui^gsdu3#
Now you must be wondering how will you memorize it. There are Password managers that can be used to store all your long and complex passwords for all of your accounts. That way, you’d only have to remember one complicated password i.e. the one to access your password manager. BitWarden, KeePass2, and 1Password are some of the reputable password managers.
2. Avoid using the same passwords for multiple accounts:
Most of the time, people keep the same or almost the same passwords for different accounts for the sake of recall. Unfortunately, It’s a hazardous move, and you should steer clear of it. Do not save any shared passwords from your email, social media accounts, or other Crypto exchanges.
3. Unique email address for each account you create:
This is simple with Gmail; you can make a unique email address by adding points (.) or a plus (+). All of these addresses are the same and can be controlled through a single account.
4. Double-check the address of the recipient:
It’s also critical to double-check the recipient’s address and the amount as once delivered; it’s impossible to retract and recover.
5. Examine the History of the Exchange:
Many individuals purchase Cryptocurrencies on exchanges only to discover that their assets get sold off over time. A few years back, hackers gained access to an exchange’s administrator account and sold off over 2,500 BTC. The price of Bitcoin collapsed as a result of this. With the price of Bitcoin reaching an all-time high, it's more crucial than ever to evaluate your exchange’s history of security and privacy before you start trading there.
6. Avoid SMS authentication:
Due to numerous incidents documented on various news sites online, using SMS verification for your exchange logins has been proven to be highly insecure. Without going into the technical language, hackers can use a variety of ways to gain access to your current SMS messages, incoming SMS messages, or even your mobile phone number.
7. Use two-factor authentication (2FA):
Alongside strong passwords, always use two-factor authentication (2FA). Utilize the strongest type of 2FA supported by the platform, ideally a Yubikey or comparable hardware security key. If your service provider doesn’t accept Yubikey, use an authenticator or Duo Security.
8. Withdrawals and Deposits:
Deposits and withdrawals must be handled appropriately by the Bitcoin exchange. When it comes to withdrawals, we must remember that short address attacks can result in money theft. Therefore, deposits and withdrawals require special attention by validating received addresses.
9. Ensure that you are visiting the correct website:
The use of phishing sites is one of the most effective techniques for hackers to obtain access to people’s exchange accounts. Phishing sites are fraudulent websites that imitate real websites such as social media platforms, online banking platforms, Crypto exchange platforms, and wallet platforms. The majority of these phishing sites are designed to look exactly like legitimate websites. To resolve this problem, always be wary about links provided via email, links from adverts, and other similar sources. It’s usually safer to type the website's URL into the address bar of your browser manually.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.