Cryptocurrency values exploded last year, growing to exceed $3 trillion globally. Now, with the sharp collapse in prices over the past two months, you may be wondering whether it’s the perfect time to buy in low. However, if you decide to take the plunge into the world of crypto investing, you should be aware that falling prices aren’t the only threat to your funds.
A Risky Market
The rapid accumulation of wealth in the crypto market, coupled with its anonymity and lack of regulation, makes it a magnet for cybercrime—and not just as a vehicle for ransomware payments. An all-time high of $14 billion in cryptocurrency was directly stolen last year. Major cyberattacks on crypto exchanges, such as the $200 million hack of Bitmart, continue to be a source of concern, but the proliferation of scams is the primary threat to investors.
Crypto scams come in myriad forms. Some rely on typical cyberattacks like phishing, while others are unique to the crypto market, such as “rug pulls,” which trick investors into pouring money into a crypto project before its creators abscond with the funds.
Due to the decentralized nature of blockchain technology, there’s rarely an intermediary to help when something goes wrong. Losses tend to be permanent, making caution paramount.
Risk is inherent to crypto investing, but you can limit your chances of becoming a crypto crime victim by following some basic crypto best practices:
- Use a secure exchange: When choosing an exchange to trade on, look for ones that provide robust security features, such as air-gapped, cold storage, and ensure it offers multi-factor authentication for your account. Large, well-established exchanges like Coinbase, Gemini, or Kraken are a safe bet for beginning investors.
- Store your cryptocurrency securely: You can keep your cryptocurrency on an exchange or transfer it to a crypto wallet. It’s generally fine to store small amounts of currency online, where it’s easy to access, but consider using an offline wallet for larger amounts to protect against cyberattacks. Just don’t lose the password!
- Watch out for phishing attempts: Phishing is rampant in the crypto space, ranging from Google Ads mimicking crypto wallet sites to Twitter bots masquerading as support agents. Verify links before clicking them and be wary of any outside messages concerning your crypto wallet.
- Be skeptical: Is a new altcoin skyrocketing with no price dips? Is a DeFi project guaranteeing a 1,000% return? Is Elon Musk offering you free bitcoin? Many people are drawn to cryptocurrency in hopes of getting rich quick—scammers use this to their advantage. If something sounds too good to be true, it probably is.
Cryptocurrency is yet another demonstration of the principle that valuable data always attracts cybercriminals. MBL Technologies is here to help protect your data from the latest threats with our comprehensive cybersecurity services. Contact us to learn more!