Cryptocurrency exchanges are attractive targets for hackers as they let cybercriminals access vast sums of digital currency. Since 2011, crypto-traders have experienced exchange hacks that have resulted in the theft of millions of dollars worth of digital coins and tokens. As cryptocurrency trading continues to blister, it’s important to understand the risk you face when trading on these platforms.
Choose a Reputable Exchange
When it comes to cryptocurrency trading, one of the best and most reliable ways to ensure your assets remain safe is to select an exchange that has a good reputation for security. As anyone who has traded digital currencies in the past can attest, some cryptocurrency exchanges are far more secure than others. Reading cryptocurrency reviews can help you find a reliable and secure exchange.
There are several measures that should be taken into consideration when choosing a reputable exchange, including its history of security incidents, the volume of digital currencies exchanged on it, and its platform type (centralized or decentralized). In addition, it is important to investigate whether or not the exchange is regulated by any higher authority such as a government agency or the financial services sector. Looking into the company’s background and terms and conditions will also help you assess its credibility. Finally, make sure you understand their KYC & AML policies and always use two-factor authentication whenever available!
Use Two-Factor Authentication
Two-factor authentication (2FA) is a simple yet effective way to keep your accounts more secure and protect your digital assets. It is a process that requires two authentications, typically an electronic device such as a smartphone or a physical token. This has the potential to significantly improve your online security and reduce the chances of falling victim to a cryptocurrency exchange hack by ensuring that only authorized users can log in to their account instead of allowing anyone with access to your password to be able to do so.
For maximum security, it is recommended that handle all cryptocurrency accounts with as much caution as possible and take extra steps like setting up 2FA for an added layer of protection. To activate it, automatically generated one-time codes (OTCs) are sent via text message, voice call, email or push notifications upon attempting to sign into an account. Moreover, some cryptocurrency exchanges also offer hardware wallets that are connected directly to users’ mobile phones in order to store and manually enter the OTCs during currency transactions without requiring internet access.
Use a Hardware Wallet
Hardware wallets are one of the most preferred and reliable methods of storing cryptocurrency. A hardware wallet is a physical device, usually resembling a USB flash drive, which stores users’ private keys in a secure environment. It provides several layers of security such as seed words, pin codes, and biometric authentication to help you protect your assets from external threats.
Another advantage of using a hardware wallet is that it allows you to store multiple currencies on the same physical device. Popular hardware wallets include Ledger Nano S and Trezor One. It should be noted that even desktop wallets can be susceptible to hacking attempts so it’s always recommended to keep your assets stored in an offline wallet rather than on the computer or mobile device.
However, please make sure you purchase your hardware wallet from the manufacturer or an authorized reseller as many fake hardware wallets are known to exist in circulation. You should also back up your funds periodically as these devices may suffer motherboard or component failure at any point in time and you will lose all your data if proper precautions are not taken in advance.
What to Do If Your Cryptocurrency Exchange Is Hacked: A Step-by-Step Guide
Cryptocurrency exchange hacks are unfortunately becoming more common as the crypto market continues to grow. If you find yourself in a situation where your cryptocurrency exchange has been hacked, it can be a stressful and confusing experience. In this step-by-step guide, we will provide you with some essential steps to take to help protect yourself and recover your stolen assets.
Step 1: Immediately Secure Your Accounts
The first step is to secure your accounts on the cryptocurrency exchange and any other exchanges that you use. Change your passwords and enable two-factor authentication (2FA) to prevent further unauthorized access. If you have used the same password for other accounts, change those passwords too.
Step 2: Contact the Cryptocurrency Exchange
Contact the customer support team of the cryptocurrency exchange as soon as possible to report the hack. They will have their own protocol to follow in such an event and may be able to help you recover your stolen assets. Make sure to provide them with as much information as possible, such as the date and time of the hack, the number of funds stolen, and any other relevant information.
Step 3: Contact Law Enforcement
Report the hack to the relevant law enforcement agencies. The cryptocurrency exchange may be able to provide you with information on which agencies to contact. Make sure to provide them with all the necessary details, such as the number of stolen funds, the type of cryptocurrency, and the date and time of the hack.
Step 4: Inform Your Bank or Financial Institution
If you have linked your bank or financial institution account to the cryptocurrency exchange, inform them of the hack. They may be able to help you prevent any further unauthorized access to your account and may be able to reverse any fraudulent transactions.
Step 5: Monitor Your Accounts and Assets
Monitor your other cryptocurrency exchange accounts and wallets to ensure that they have not been compromised. Keep a close eye on your cryptocurrency assets to ensure that they have not been transferred or stolen. If you notice any suspicious activity, report it immediately to the relevant authorities and your cryptocurrency exchange.
Step 6: Educate Yourself on Cryptocurrency Security
Educate yourself on the best practices for cryptocurrency security. This includes using strong passwords, enabling 2FA, and storing your cryptocurrency assets in a secure hardware wallet. By taking the necessary precautions, you can help prevent future hacks and protect your assets.
Cryptocurrency exchanges are a popular target for hackers and scammers, so it’s important to be aware of the risks involved when trading on these platforms. By understanding the different attack methods used by hackers and taking proactive measures like using two-factor authentication and keeping your funds safe in hardware wallets, you can mitigate the security risk posed by these exchange hacks and protect yourself from financial loss. Taking control of your own safety is key to protecting yourself in an increasingly digital world.