Crypto Crooks: How To Avoid Them When Trading Crypto

Cryptocurrencies have many security benefits over regular currencies. They are a decentralised non-physical form of currency – which means there’s no risk of credit card fraud or counterfeit money. 

However, cryptocurrency still comes with its security risks. Hackers can still get hold of your funds, and because you are not protected by a bank, there is no way of getting this money back. Therefore it’s important to take certain security steps when trading crypto just as you would when using regular money. 

Just what are some of the best ways to avoid being a victim of crypto crime? This post lists a few security measures to consider. 

Use a reputable exchange

Crypto exchanges are where you go to buy and sell crypto. In the same way that you would want to buy a car from a reputable dealership, it’s important to choose a reputable exchange. What makes an exchange reputable? Such exchanges are used and trusted by many users. They have many good reviews and offer security features such as multi-factor authentication, optional cold storage and crypto insurance cover in case of theft. This post lists some of the best crypto exchanges ranked by security. Consider sticking to one of these exchanges when buying crypto. 

Secure your internet connection

It’s also important to use a secure internet connection when trading crypto. There are  hackers out there that try to get hold of wallet information by setting up fake public wi-fi or injecting malicious software into public wi-fi. You can steer clear of these hackers by not trading crypto or accessing your wallet while using public wi-fi. Alternatively, you can simply use a VPN, which can hide your personal data from hackers. 

Enable 2FA

Reputable crypto exchanges will offer the option of protecting your account with 2FA (two factor authentication). This is a security barrier that requires two forms of authentication – usually a password and a second form of authentication. This second form of authentication could be code sent to your phone or email account, or a biometric password such as facial recognition or a fingerprint. All in all, 2FA makes it much harder to hack into your account than simply having a password, and most cybercriminals won’t attempt to hack into your account.  

Choose a secure wallet

Cryptocurrencies can be stored in two types of wallet: hot wallets and cold wallets. Cold wallets are generally the most secure option as they are not connected to the internet. They are essentially USB sticks that are designed for storing cryptocurrency long-term. This Techopedia guide compares some of the most secure cold storage wallets on the market. Hot wallets are connected to the internet and should only be used for storing small amounts of crypto in, or when temporarily storing crypto just before/after a transaction. 

Use a blockchain explorer

Blockchain explorers can allow you to follow the journey of a transaction on the blockchain. This is useful for checking the wallet address of a recipient to make sure that payment is going to the right place. Blockchain explorers also have added benefits such as checking that a transaction had executed correctly. There are different explorers out there for different block chains such as OP Block Explorer for the Optimism blockchain. 

Look out for phishing scams

Just as phishing is a popular criminal tactic for getting hold of credit card information, it can also be a criminal tactic for getting hold of sensitive crypto information such as crypto exchange account passwords and private keys. There are a few different phishing scams to be wary of:

• You should be very careful of emails from people posing as crypto exchange support staff or people posing as digital wallet supplier support staff. Check any previous emails you’ve had from these people and compare the email address and format of the email.
• Another thing to watch out for is links leading to cloned websites that accept crypto payments. A cloned website will usually not have an SSL certification (look for the padlock symbol left of the website address) and may even have a different URL.
• You also need to be careful of fake cryptocurrency giveaways with links. These may be sent to you via email, but can also be found on social media. While there are genuine cryptocurrency giveaways out there, you should make sure that it’s coming from a trusted source.
• You should also be careful of emails from ‘crypto advisers’ or ‘get rich quick’ crypto schemes. A lot of these are just criminals trying to get access to your sensitive information and should not be trusted.