As the crypto industry grows exponentially, so does the number of cyber thefts and attacks on crypto exchanges and individuals holding cryptocurrencies. Especially in the pandemic, the number of crypto thefts has risen enormously. Recently, hackers stole $600 million by exploiting a weakness over the Poly Network, a platform that connects several blockchains. This was one of the biggest crypto thefts ever in history. Cryptocurrency thefts and scams have increased by 1000% in 2021 as compared to the previous year. Cryptocurrencies can be directly stolen from individual crypto wallets; however, it is challenging to hack the entire blockchain network. Major crypto exchanges, including Coincheck and DAO, have lost huge amounts of money to crypto hacking and thefts. Such hacks discourage new investors from entering the crypto space and force legislators to pass stricter regulations over cryptocurrencies.
Crypto thieves have found new innovative ways to steal cryptocurrencies from crypto owners and investors. There are many ways hackers and attackers use, for example, getting access to your private keys and removing the funds from your wallet, sending phishing emails and messages, and installing malware programs on the victim’s computer. Sometimes, the hackers can call your mobile phone carriers and ask them to switch their number or account. This way, they get access to all your data. This process is called phone porting. Crypto thefts and scams are inevitable in several cases; however, there are specific preventative steps owners of cryptocurrencies can take to reduce their risks and protect their crypto investments. You can use certain safeguards to reduce the chances of crypto theft. It is important to note that identifying a crypto thief is relatively more difficult due to the anonymity provided by blockchain technology. Therefore, there is little or almost no chance of retrieving stolen funds. In this article, we’ll help you to keep your crypto investments safe by providing some preventive measures. They might be a little difficult to follow, but you’ll be saving your crypto investments from any thefts in the future if you can do that.
Some people keep their cryptocurrencies on crypto exchanges that facilitate crypto transactions. These platforms have their own measures to protect digital currencies, but they are not immune to crypto hackers and thieves attacks. Such hackers might exploit a vulnerability in the platform to steal people’s cryptocurrencies. Therefore, it is recommended that you limit the amount of cryptocurrencies you keep in these exchanges. Only keep the cryptocurrencies that you need for trading in exchanges. After you have completed your transactions, you should move your crypto holdings from exchanges. Since exchanges hold large amounts of cryptocurrencies, they are a lucrative target for cyber thieves and attackers. They can get millions by attacking an exchange directly. Once an exchange is hacked, you might lose all your crypto holdings. If the exchange is generous enough, it might reimburse its users’ money (this happened in some cases), but it might not always be the case. Therefore, most tech-savvy crypto investors take their cryptocurrencies out of the exchange as soon as they have completed the transaction. It is also to be noted that not all exchanges are entirely safe, and it is the user’s responsibility to check if the crypto exchange they have selected is trustworthy.
Securing Your Wallet
As discussed earlier, crypto thefts usually happen through crypto wallets, and therefore, you must take additional steps to secure your wallet. One of the best ways to protect your cryptocurrency is to invest in a crypto wallet that you can trust. There are both hot storage and cold storage wallets. Hot storage wallets exist online, and their keys are stored in an online app or software. They are usually protected by two-factor encryption. Like online banking systems, they allow for instant transfer of your crypto funds. To keep your online wallets safe, you should always use two-step authentication. Keep your private keys safe in an offline location. The other kind of wallet is cold storage wallets which exist physically. They usually look like USB drives but are protected by password keys. Usually, cold storage wallets are considered safer because crypto thieves cannot hack them. Even if a cold storage wallet is stolen, your cryptocurrencies will remain protected because they will be locked via a PIN code. However, it is your responsibility to keep your cold storage wallet in a locked safe where it cannot be stolen.
Protect Your Devices
If you keep your cryptocurrencies on your devices, you should take steps to keep these devices secure. According to a report by the Anti-Phishing working group, one-third of computers are subject to malware attacks. Most of the computers do not have enough security to protect your cryptocurrencies. To keep your device safe, install an antivirus and anti-malware program and run them regularly. You can also encrypt all the data on your device. This will ensure that data will be accessed by thieves even after it is stolen. Use operating systems like Linux, which are less vulnerable to malware attacks than windows.
Do Not Brag
No one knows how much cryptocurrency you hold unless you tell them. Bragging about your cryptocurrency holdings over public social media platforms like Facebook and Twitter can make you a target for crypto thefts and hacks. Several examples of investors bragging about their holdings and then being duped. Avoid discussing your crypto investments in public forums and limit your public exposure. The above-discussed ways are not all-comprehensive. There are many ways crypto thieves are using to steal cryptocurrencies, and therefore, you should use a combination of all these methods to make your crypto holdings as safe as possible. Cryptocurrencies have opened up a lot of opportunities for investors, but at the same time, they have laid unique challenges in front of them. By using precautionary measures, you can safeguard your money, cut losses and reap the benefits offered by cryptocurrencies. To know more about how you can keep your crypto holdings safe, read our blog.