crypto: Fear of Scams: Here are 5 Steps to Take for Safe Cryptocurrency Investments
As an investor, you are concerned about the number of checks and balances in place. The key is to always keep your digital currency under control to avoid crypto scams.
Becoming a “hard target” will make your digital currency less attractive to hackers. Having no global crypto regulation has its pros and cons. Crypto has seen rapid innovation, but security has not been standardized. You are responsible for managing the user. So you can take some steps to keep your cryptocurrency safe, including crypto age precautions.
Here’s how to keep out thieves, hackers, fraudsters and scammers:
1. Invest in recognized, safe exchanges
Buying and selling cryptocurrency takes place on stock exchanges, just like stock trading. There are many crypto exchanges with significant trading volumes and there are always more. Kraken, Gemini, Coinbase, Crypto.com and Binance are without a doubt the safest and best crypto platforms. Kraken covers 99% of the world and has a dedicated cyber security team.
The New York Department of Financial Services regulates Coinbase and Crypto.com, while the Federal Reserve regulates Gemini. Cryptocurrency exchanges like the ones above have solid cyber security infrastructure and store user crypto in 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 trade crypto at home, you need a little security setup. For online security, set up your firewall and anti-malware software and create a strong password for your router.
Most routers have a default password. To be 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 communications with your ISP so no one can see 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, you should research it thoroughly. Don’t be afraid to miss out and don’t give in to peer pressure. An investor who rushes because of FOMO will have their portfolio decimated.
In a September 2021 survey, celebrities influence nearly half of US crypto investors’ investment decisions. In less than one month after being approved by a star, EMAX lost over 90% of its value, showing that such behavior can negatively 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 giving your sensitive information to a criminal via email, text or social media. They offer free cryptocurrency or NFT on their website to trick you into giving them access to your wallet.
When they receive your cryptocurrency or NFT, they can take it. Think it will never affect you? Think again. Famous actor Seth Green fell victim to a phishing scam that cost him thousands of dollars. For cryptocurrency safety, 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 give them access to your wallet.
5. Put your crypto in a multi-wallet
The best way to keep your crypto is to trade it instead of holding it, but from a security point of view it is not the best choice. Trading on exchanges is fine, but outages do happen, and some platforms stop withdrawals, especially during a downturn.
It is best to store crypto in multiple wallets, preferably cold or hardware, and not on exchanges. There is nothing better than a cold wallet since it is not accessible from the internet.
Cold wallets are best for pretty much everything. Ideally, keep most of your crypto in cold wallets and the rest in software wallets or exchanges if you trade.
While taking a proactive approach to cybersecurity can seem overwhelming and time-consuming at first, when it comes to money and digital assets, it’s better to prevent damage than to mitigate it. You can reduce the risk of a breach by trading on a secure exchange, splitting your assets between multiple cold wallets, using secure internet connections, and using multi-factor authentication. You can do everything right, but cybercriminals can still compromise your information, so make sure you have a plan to deal with such incidents.
The author is the founder and CEO, Heru Finance.
