crypto: Fear of Fraud: Here are 5 steps to take for secure cryptocurrency investments
As an investor, you’re concerned about the number of checks and balances in place. The key is to always keep your digital currency under your control to avoid crypto fraud.
Becoming a ‘hard target’ will make your digital currency less appealing to hackers. Having no global crypto regulation has its advantages and disadvantages. Crypto has seen rapid innovation, but security hasn’t been standardized. You’re responsible for managing it as a user. So, you can take some steps to keep your cryptocurrency safe, including crypto-age precautions.
Here’s how to keep thieves, hackers, fraudsters, and scammers out:
1. Invest in reputable, safe exchanges
Buying and selling cryptocurrencies takes place on exchanges, just like stock trading. There are many crypto exchanges with substantial trading volumes, and there’s always more. Kraken, Gemini, Coinbase, Crypto.com, and Binance are arguably the safest and best crypto platforms. Kraken covers 99% of the world and has a devoted cybersecurity team.
The New York Department of Financial Services regulates Coinbase and Crypto.com, while the Federal Reserve regulates Gemini. Cryptocurrency exchanges like those above have solid cybersecurity infrastructure and store user crypto at geographically distributed, heavily monitored, and armed storage facilities.
2. Use a secure internet connection
You should keep your crypto account safe by avoiding public WiFi and suspicious websites, but that’s not the only precaution you should take. Especially if you’re trading crypto at home, you need a little security setup. For safety online, set up your firewall and anti-malware software and create a strong password for your router.
Most routers have a default password. To remain safe, update your router software, enable network encryption, and disable network name broadcasting. Add security by investing in a Virtual Private Network (VPN). VPNs hide your online activities and encrypt your communication with your internet service provider so that nobody can view your activities.
Finally, it is advisable to use a dedicated device to access your cryptocurrency assets online.
3. Take the lead – don’t be a follower.
Before using a coin or a lending business, research it thoroughly. Don’t be frightened of missing out and don’t succumb to peer pressure. An investor who rushes because of FOMO will have their portfolio decimated.
In a September 2021 survey, celebrities influence almost half of US crypto investors’ investment decisions. In less than one month after being endorsed by a star, EMAX lost over 90% of its value, demonstrating that such behavior can adversely affect investors.
4. Don’t fall victim to phishing
Historically, phishing has been more common than cryptography as a scam. Phishing scams involve tricking you into providing your sensitive information to a criminal via email, text message, or social media. They offer free cryptocurrency or NFTs on their website to trick you into giving them access to your wallet.
Once they receive your cryptocurrency or NFT, they can take it. Do you think it will never affect you? Think again. The well-known actor Seth Green was a victim of a phishing scam that cost him thousands of dollars. For cryptocurrency security, do not click on random links you receive in emails or text messages. Do not provide passwords or wallet recovery phrases to shady websites, nor should you allow them access to your wallet.
5. Put your crypto in a multi-cold wallet
The best way to keep your crypto is to trade it instead of hold it, but from a security standpoint, that’s not the best choice. It’s okay to trade on exchanges, but breaches happen, and some platforms halt withdrawals, especially during a downturn.
It is best to store crypto in multiple wallets, preferably cold or hardware ones, and not on exchanges. There’s nothing better than a cold wallet since it can’t be accessed from the internet.
Cold wallets are best for pretty much everything. Ideally, keep the bulk of your crypto in cold wallets and the rest in software wallets or exchanges if you trade.
Although taking a proactive approach to cyber security may seem overwhelming and time-consuming at first, it is better to prevent damage than mitigate it when it comes to money and digital assets. You can lower the risk of a breach by trading on a safe exchange, splitting your assets between multiple cold wallets, using secure internet connections, and using multi-factor authentication. You may do everything right, but cybercriminals may still compromise your information, so make sure you have a plan to handle such incidents.
The author is Founder & CEO, Heru Finance.
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