HomeCryptocurrency NewsA guide to secure your accounts on crypto exchanges 

A guide to secure your accounts on crypto exchanges 

There have been countless cases where people have unwittingly lost millions of dollars on exchanges as a result of crimes or scams. New users may fall prey to phishing websites, while experienced traders may lose money by trading too quickly without double-checking the website URL or destination address. Let's look at some tips for avoiding these traps and ensuring the security of your accounts when using cryptocurrency exchanges.

By CNBCTV18.com May 31, 2023, 7:29:45 PM IST (Published)

While it is generally advised to avoid keeping your funds on crypto exchanges, active traders often find it necessary to utilise these platforms. However, because of the high quantity of consumer assets they retain, cryptocurrency exchanges are popular targets for attackers and scammers. There have been countless cases where people have unwittingly lost millions of dollars on exchanges as a result of crimes or scams. New users may fall prey to phishing websites, while experienced traders may lose money by trading too quickly without double-checking the website URL or destination address. Let's look at some tips for avoiding these traps and ensuring the security of your accounts when using cryptocurrency exchanges.

Use Strong Passwords  

Using a strong password is a fundamental yet effective measure to protect your crypto exchange funds from password-related hacks. If you choose weak passwords without incorporating numbers or symbols, your account could become highly susceptible to theft.

This is because hackers often employ specialised software capable of testing a wide range of possible combinations to guess your account password. Some attacks, like Brute Force attacks, rely on trial-and-error methods to guess your login credentials, encryption keys, and passwords. To counter such efforts, it is crucial to utilise long and complex passwords.

Also Read: Cryptocurrency, AI, Metaverse, and Web3; How are they interrelated?

While remembering long alphanumeric passwords can be difficult, you should avoid storing them online and instead keep physical notes. Additionally, avoid using the same password for multiple accounts. If a hacker or scammer gains access to one of your accounts, such as your exchange profile or social media account, there is a higher chance that they will attempt to log in to your other accounts. To add an extra layer of security, it is advisable to periodically change your password to mitigate the risk of such attacks.

Avoid SMS authentication  

Try to avoid using SMS verification for your exchange logins. With the advancement of technology, hackers have found ways to gain access to incoming SMS messages, control mobile numbers, or manipulate phone screens. Although SMS verification is commonly used in 2-Factor Authentication, where a platform sends a One-Time Password (OTP) to your mobile number after entering the password, it is not completely foolproof.

A more secure alternative is to use open-source authenticator apps for 2-Factor Authentication. These apps generate a new code every 30 seconds or so, rendering any intercepted codes useless as they would have already expired by the time hackers attempt to use them. By employing such apps, you can enhance the security of your accounts and protect them from such attacks.

Use devices free of malware and viruses 

Some types of malware can track keystrokes and gain access to your clipboard history, potentially compromising sensitive information. Therefore, when using physical devices like USB flash drives or external hard disks, it is essential to use antivirus software once or twice a week to remove any potential threats.

Additionally, to ensure your device remains clean and secure, keep updating your operating system regularly. Software updates often include crucial security patches that address vulnerabilities and protect your system from emerging threats.

Always check the URL of the exchange  

Internet users tend to click on the first search results that appear on search engines like Google. However, you must be cautious of doing the same as there are instances where users mistakenly access phishing websites that closely resemble legitimate ones. To prevent falling victim to phishing attempts, have a skeptical mindset towards URLs and pop-up advertisements. It is safer to manually type in the website addresses or bookmark the sites of crypto exchanges you frequently use.

One common type of attack in this category is called the address poisoning attack. In such attacks, malicious actors send a small amount of cryptocurrency, or a random NFT, to an address that closely resembles your own address. Scammers then wait for you to initiate a hasty transaction and send money to their address instead. To avoid such scams, double-check the URL of websites and carefully review addresses when conducting transactions.

Make sure to secure your API key on the exchange account

API keys are software intermediaries that facilitate the sharing of data between two or more applications. For instance, CoinMarketCap allows other platforms to integrate its cryptocurrency data, including prices, market cap, and volume. Similarly, users or applications utilise API keys to access specific functions on exchange accounts, such as order history or the authority to withdraw funds.

However, you must exercise caution when it comes to using API keys, especially those with withdrawal capabilities. If a hacker manages to steal such a key, they could potentially drain your funds. Therefore, it is advisable to use API keys solely for checking or tracking funds. To be on the safer side, navigate to the API Key Permissions and deselect trade functions in your crypto exchange profile.

Conclusion 

While implementing the aforementioned measures can enhance the security of your account, it is crucial to take additional precautions. Avoid using public Wi-Fi networks, refrain from sharing sensitive information online, and exercise caution when encountering suspicious links or pop-ups. Additionally, bear in mind that the customer care representatives of any legitimate platform will never request your password or private key. They may only ask for your email address or support ticket ID. Be vigilant and avoid falling victim to scams orchestrated by individuals posing as personnel from crypto exchanges.

Also Read: Top trends that have revolutionised the cryptocurrency space