The crypto market is full of lucrative investment opportunities, but fraud and other security breaches continue to plague the industry. Therefore, learning ways to avoid crypto fraud is now imperative.
How can you protect yourself against cryptocurrency fraud? How do you keep your personal crypto information uncompromised? See the following tips:
Determining the Validity of an Initial Coin Offering (ICO)
Investing and trading are two distinct activities. However, ICOs are leaning towards the commercial realm as they are marketed to those with little experience in crypto.
It’s hard to resist the lure of a promising ICO. However, this is where many inexperienced traders (and investors) fall victim to scammers.
Ways to spot fake ICOs include:
- Look at the people behind the website
- Learn more about the company’s history
- Scour their social media pages for clues
- Check that the ICO has sufficient resources, a feasible implementation plan and an accurate financial model
- Find out about code or examples that have been published on a hosting service like GitHub
- Check that the creators of the ICO have set up a real escrow service to manage investors’ funds
- Investigate before acting on a deal that sounds too good to be true
Use a program to cover your tracks on the Internet
You can also avoid crypto fraud by cleaning up your Internet tracks. A person’s online activities leave a trace known as a digital footprint. In other words, almost everything you post or enter on the Internet is recorded.
Information you enter on social media accounts, things you search for on Google, login information, etc. are all stored.
Hackers can use them to crack your private data. Therefore, the security of your crypto assets is at stake. So you must block this flaw at all costs to avoid crypto fraud.
You can hide your digital footprints using Virtual Private Networks (VPNs). This way you hide your virtual identity and prevent third parties from monitoring your online activities.
Be sure to keep an eye on your account activity
You should take the time to carefully inventory your cryptocurrency holdings. Check your credentials, wallets, and other accounts where you might have information about crypto assets. Failure to do so puts your financial security at risk.
First, check your mailbox carefully to see which cryptocurrency platforms you have joined. Then save them where you feel safest. This can be on paper or electronically.
You can keep tabs on all activity once you have a thorough understanding of all your accounts. And it will be easy to react quickly if something goes wrong.
Limit access to your API keys and implement two-factor authentication
Two-factor authentication improves the security of your online profile by requiring a second piece of information other than passwords,
The use of 2FA SMS is not recommended these days due to the possibility of interception. Instead, crypto experts recommend Google Authenticator. The app works even when you are not connected to the internet.
It is also advisable to restrict access to your API keys from specific IP addresses. This restriction is especially vital if you hire a third-party application to facilitate and facilitate your transactions. This way, even if someone discovers your keys, they won’t be able to access your account.
Don’t keep all your money at the exchange
In 2019, hackers stole nearly $4.2 million worth of cryptocurrencies from Bitrue – a Singapore-based crypto exchange. So, as an individual, you have to be careful if such an established platform can be hacked.
Cryptocurrency exchange platforms have fallen prey to hacks and other security vulnerabilities over the years. Many of their user accounts have been frozen or possibly compromised as a result.
For this reason, you should not trust any cryptocurrency exchange with your tokens. Instead, store it in a secure wallet.
You can choose one of the following wallets:
- A paper wallet
- A cold wallet
- A warm wallet
- A mobile wallet
The crypto community recommends a cold wallet (also known as a hardware wallet) at best. In it, your keys are securely stored in an unconnected device using a Secure Element (SE) chip.
Beware of phishing emails
Another way to avoid crypto fraud is to be aware of thieving emails. Hackers are becoming more sophisticated in their attempts to access sensitive information through phishing. Therefore, you should always exercise caution when clicking on links in received emails.
These phishing emails often impersonate reputable companies, making them difficult to spot. But you can identify and avoid them by:
- Check a website’s domain name before entering personal information
- Beware of any communication asking for confirmation of sensitive information
- Treat all unknown email attachments with suspicion, as they may contain malware
Don’t make it easy for hackers to scam your hard-earned money. Hacking skills will be even better. But by taking basic security measures, you will stay ahead of your crypto journey.