The security practice of cryptocurrency is a prevalent issue among investors as protecting your crypto from scam/theft is important.
Cryptocurrency is garnering huge popularity as its value keeps enthusing a large number of people into the crypto market, although it is characterized by volatility many new investors are jumping into the fray. Hackers and other criminals, on the other hand, see this as a golden chance for them to prey on new investors. Therefore, keeping your money safe is one of the most important things to keep in mind when investing in cryptocurrencies.
Over $97 million worth of crypto was stolen from the cryptocurrency exchange Liquid in August 2021. Another $30 million in Bitcoin and Ethereum was stolen from Crypto.com, a North American Bitcoin and Ethereum exchange, in January 2022.
There have been a lot of attacks on cryptocurrency investors recently, and you may be wondering how to keep your crypto safe. This article aims at proferring ways of securing your crypto investment from theft and scam.
Meanwhile, it should be noted that no security method is foolproof, and you may decide not to use some of the ones we suggest if they are too difficult to use. There are also a lot of legal risks to investing in crypto, but we will provide some best practices to consider in keeping your cryptocurrency safe and secure.
Best Security Practices To Keep Your Cryptocurrency Safe
Use Two-Factor Authentication For Your Exchange
A crypto exchange account is typically where your first cryptocurrency purchases are held. One of your wallet addresses can be hacked by a third party and used to “withdraw” your cryptocurrency.
To prevent these attacks, you should first ensure that your crypto purchases are safe, and then enable two-factor authentication (2FA) for withdrawals from your exchange app.
Using 2FA requires you to enter a code generated by your phone every time you withdraw money from your cryptocurrency account. If your phone battery dies or you have to get your phone from another room to withdraw, this could spare you from losing your crypto if an attacker gains access to your account.
In the absence of 2FA, you must rely on the security of your email address and password to protect your cryptocurrency. These can be quite easy for criminals to get around.
Your password hash can be stolen from another website and broken using hash-cracking software, or an attacker can mislead you into downloading malware via email and stealing your email password, then utilize the “reset password” option to take over your exchange account.
Use A Strong Password To Protect Your Crypto
Malware shouldn’t be able to access your seed words if your device is compromised with malware. As a result, no one but you knows your password. An attacker may be able to guess hundreds of random characters until the vault is decrypted using Hashcat’s password recovery tool or similar hash-cracking software.
Your password’s complexity determines how quickly and cheaply they can crack it. Passwords that are longer are more difficult to crack. It is significantly more difficult to break a password if it contains both upper- and lowercase letters, numbers, and special symbols.
Even if you create a password that takes years and millions of dollars in computing power to decipher, it’s still possible for someone to hijack your account.
Your seed words can help you remember your password even if you lose them, so don’t worry about forgetting them if you make your password too complicated.
But what happens if you’ve lost your login credentials? Uninstall the wallet, reinstall it, and import your seed words during the installation process if you still have them. When you do this, your account will be restored and you will be able to choose a new password during the installation process.
As a final thought, you should make sure that you use an exceptionally strong password to safeguard your cryptographic assets.
Use A Different Password For Your Crypto Wallet
While it is tempting to use the same password for your wallet as you do for your website, there are several good reasons to keep your wallet password separate.
Hackers may gain access to your password hash and cracking software if they break into a well-known website you frequent. A popular website (like Facebook) is more likely to be hacked than your personal computer.
As a second point, many people store their website passwords in their browsers in plaintext. If your device gets infected with malware, the attacker may be able to get their hands on all of your passwords for all of your online accounts. Redline Stealer is a piece of malware that has gained a lot of popularity among hackers since it allows them to gain access to this kind of information.
This is bad enough, but if you use the same password for your wallet as you do for your website, the attacker will have access to both and be able to decrypt the vault’s keys. Make your wallet password one of a kind because it is probably the most crucial one you have.
Use A Hardware Wallet If Possible
Use a hardware wallet, a USB device that can store your private key vault to protect your crypto. It is designed to ensure that your seed words cannot be exported from the device without encryption.
Because a hardware wallet does not have an Internet connection, an attacker would have a tough time compromising it.
Hardware wallet transactions necessitate an ongoing USB or Bluetooth connection to your computer or mobile device. The wallet generates a signature and sends it to your internet-connected device, allowing you to conduct transactions without risking the exposure of your private key to malware.
Because of the PIN codes on hardware wallets, even if your wallet is taken, the attacker will be unable to access your crypto.
Hardware wallets have been cracked by security professionals using incredibly advanced techniques such as hardware implants, RF signals, and microcontroller memory rewrapping, although these hacks required physical access to the wallets.
If you lose or have your hardware wallet stolen, you may wish to transfer your crypto out of the wallet’s address as quickly as possible. Installing a solid home security system will help keep your hardware wallet safe if you keep it at home.
Don’t Enter Your Seed Words On A Website
A browser extension wallet will constantly ask for your password if you are using it. When you reopen your browser, it will ask for your password. You’ll be prompted for your password if you leave your wallet for a few minutes.
If a popup that looks like your wallet pops up while you’re browsing the web and asks for your seed words, it’s a fraudulent website. Close the tab and clear your browser’s cache are your best bets here.
Uninstalling and reinstalling your wallet from a blank browser page should fix any issues you’re having. Thus, you’ll be sure to work with your wallet and not a web app on a different page.
Be Wary Of Emailed Files
Users are routinely tricked into opening a malicious attachment in an email to gain access to their private keys. These emails are frequently crafted to appear as though they have originated from a reputable business.
Suppose an attacker analyzes your internet activity and discovers that you are looking for a new job. When you receive an email from a company that appears to be hiring for a position similar to what you’re looking for, be cautious.
If the company is real and the person’s name is similar to that of an employee, the email may be genuine. Because you are so happy that someone from the firm has emailed you, you may not realize that the email address is somewhat different from the one the company uses.
As a result of our review of your LinkedIn profile, we believe you will be a wonderful fit for this role,” the email reads. I need you to complete this. Please complete the below pdf and return it to us as soon as possible with the date and time you are available for an interview.
You save the pdf file on your computer. When you open the file, malware is automatically installed on your system.
If you’re not using a hardware wallet, the attacker has access to your key vault at this point. All of your website passwords are at risk, and they may all be entered into your wallet and tested to see if one works. They can employ a variety of methods to either steal your seed words or get you to hand them over voluntarily.
You can defend yourself from this type of assault by utilizing a separate computer for your cryptocurrency exchanges from the one you use for email. Not installing your wallet on the main PC is an option.
Alternatively, you may simply be extra cautious every time someone invites you to download a file via email, which is less expensive. It’s a good idea to look at the email address, which is likely to have a spelling error or something else amiss if you look at it closely.
Avoid Public Wi-Fi
Free public Wi-Fi at a restaurant or coffee shop may seem like a convenient option if you need to access the internet while away from home. But it is a good idea to avoid using public Wi-Fi if you’re conducting crypto transactions. This is owed to the fact that Wireshark and similar applications can easily intercept your internet data when you use free public Wi-Fi.
Cryptocurrency sites can be identified by using the information they receive. There is a possibility that they will be able to see your transactions in some cases.
They may not steal your crypto from you, but scammers may pay more attention to you if they discover that your transactions or viewing of crypto sites are of significant value. That’s probably not what you’re looking for.
Additionally, you can prevent scams by signing up for a virtual private network (VPN).
The crypto market continues to record new investors as more people download wallets and join networks for the first time, but this boost in activity also leads to an increase in criminals who attempt to take advantage of the new entrants into the crypto space. Therefore, it is important to stay woke to any impending threat that might lead to the loss of your cryptocurrency.