Security Risks of Storing and Trading Cryptocurrencies

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While blockchain, the technology on which cryptocurrencies are run, is designed to be extra secure through encryption, trading, and storing these coins still has its risks. As the crypto technology and the number of businesses receiving crypto payments continue to rise, so does the number and intensity of crypto-related cybercrime. In fact, there has been a significant rise in crypto-related fraud cases in the past months due to the pandemic.

The bad actors are capitalizing on the high levels of anxiety and fear brought about by the novel coronavirus to trick unsuspecting victims into various kinds of fraudulent schemes involving cryptocurrency.

Crypto-related security risks are real and can be financially overwhelming for those who don’t learn about them and look for ways to protect themselves. Below are some of the cybersecurity threats that crypto investors should be aware of.

Phishing

One of the ways by which scammers use phishing to steal your coins is by creating homograph domains and websites that look like legitimate trading platforms. Phishing emails are then sent to unsuspecting users, with links or attachments that when clicked leads to the spoofed website that ends up disclosing user credentials.

During the coronavirus pandemic, cybercriminals are sending phishing emails that masquerade as WHO and different government entities with the aim of tricking people into donating Bitcoin or any other cryptocurrency to fake charities or clicking on venomous links.

Theft

Blockchain technology, which makes it possible for crypto-related transactions to take place is decentralized, which makes it exceptionally hard to compromise. Well, blockchain may be the most secure technology around, but that doesn’t mean it is 100 percent secure.

There have been several cases of third-party service providers and crypto exchanges losing funds due to hacking and other malicious activities. A study done by CipherTrace revealed that crypto criminals have already made away with $1.4B in 2020.

Human Error

As human beings, we are bound to make mistakes. We interchange numbers, write them wrong, or make other blunders that are sometimes seized—and sometimes not.

If you happen to enter a wrong address during a transaction, you could lose part of or your entire online fortune. Remember a crypto transaction is irreversible.

Ways to Protect your Cryptocurrency

Clearly, it is extremely important to look for ways to protect your coins, and there are several ways to do so as mentioned below.

Use a VPN

The internet is full of threat actors, watching your every move, and this puts your cryptocurrency at risk. When making any crypto transaction, it is advisable that you only use a secure internet connection.

Avoid free public Wi-Fi networks at all costs, but if you have to use one, ensure you are connecting via a VPN. A VPN hides your location and IP address, keeping all your internet activities private from threat actors. As a crypto trader or investor, buying a VPN is one of the best ways to protect your coins from being stolen.

Practice Email Security

Phishing is so far the most productive way for cybercriminals to procure private information. Phishing scams via venomous emails and ads are widespread in the crypto world. To avoid being phished, be careful when making cryptocurrency transactions and avoid any malicious-looking and unknown links.

Also, ensure you are using a reliable email service with strong anti-phishing protection to successfully prevent hackers from getting a hold of your crypto wallet and stealing your coins.

Use Two-Factor Authentication

Also known as two-step verification, two-factor authentication (2-FA) means setting up your account so that it can require a second authentication before giving you full access. This means the scammers will have a difficult time gaining access to your wallet and stealing your cryptocurrency. 2-FA offers that extra layer of protection that your wallet requires to be secure. To access your wallet, you’ll need both the password and a one-time password (OTP) in the form of a text message, Google Authenticator, or YubiKey.

Use Hardware Wallet

Unlike hot wallets or software wallets, cold wallets or hardware wallets don’t connect to the internet and are, therefore, not disposed to cyberattacks. A hardware wallet is the best option if you want to keep your private keys safe.

Install Antivirus Software

Malware such as CryptoShuffler are being used by hackers to steal cryptocurrencies from infected devices. The CryptoShuffler trojan is designed in such a way that it can detect and replace a crypto address in the clipboard with the hacker’s address. To detect and protect your computer from such malware, ensure you use reliable antivirus software. Also, ensure your antivirus is updated at all times to have all the latest anti-malware functionalities.

As a crypto trader and investor, you are solely responsible for protecting your online fortune. By learning the dangers you are exposed to and taking the measures necessary to protect yourself, you will not only become a successful investor but a responsible one for that matter.