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Cryptocurrency trading and investing continue to become popular among global traders. While it keeps attracting millions of individuals, it also attracts cybercriminals. If you have been tracking the crypto market and staying informed with the latest trends. In this case, you probably know that billions of dollars have been siphoned off via crypto attacks since 2012. This is primarily because of cryptocurrencies’ untraceable nature.
The good news is that you can protect your investments against cyber attacks. These attacks include phishing, airdrop crypto scams, SIM-swap attacks, and more. There are various solid practices to implement, which we will share below.
In This Guide
Why are Crypto Hacks on the Rise?
While cryptocurrencies are backed up by solid technology, there is still a rise in crypto hacks. One of the reasons why hacking continues to skyrocket is due to the anonymous nature of crypto transactions. With this, cybercriminals easily steal digital assets without any identity proof. As a result, it will be difficult for crypto owners or exchanges to track the lost tokens.
The increasing use of DeFi platforms also plays a role in the rise of crypto hacks. By allowing investors to lend, borrow, and trade cryptocurrencies without intermediaries. In this case, digital tokens are prone to vulnerabilities.
Additionally, many exchanges and digital wallets do not have the best security measures. These platforms are also internet-based and hold large volumes of tokens. While investors are busy storing their tokens on exchanges and wallets, hackers are trying to find ways to steal them.
Common Types of Crypto Hacks
There are various types of crypto hacks to understand. This will help you identify the best approach for protecting your tokens.
- Bridge Attacks – In this type of attack, cybercriminals target cryptocurrencies while they are being transferred across blockchains. They may insert bugs into the bridge code or use cryptographic keys to access these tokens.
- Wallet Hacks – Attacks on crypto exchanges have been out of control, with even the biggest platforms becoming targets. For this reason, many investors store and manage their assets on digital cold or hot wallets. Hot wallets are always connected to the internet, making them vulnerable to cyberattacks.
- Exchange Hacks – Exchanges have been targeted by fraudulent individuals throughout the years. This is because of their ability to hold a large number of cryptocurrencies. Through phishing, key theft, and more, hackers have been able to get away with billions worth of tokens stored in the exchanges.
Best Practices to Protect Your Crypto Investments
If you own cryptocurrencies or are looking to invest in this landscape, you can protect your investments using the tips below.
- Use Hardware/Cold Wallets – While hot/software wallets are best for short-term investments, consider cold wallets for long-term storage. This will make it challenging for hackers to get hold of your assets.
- Use a VPN – Use a VPN for an added layer of safety to your digital tokens. Note that VPNs encrypt online traffic, thus keeping your assets off hackers’ radar.
- Ensure Your Software is Updated – Hackers prefer outdated software as they are easy to get through. Ensure your exchange or wallet’s software are updated to limit vulnerabilities. You can also put your device under anti-virus software and firewalls.
- Employ Strong Passwords and Biometrics – Secure your exchange or wallet with strong passwords that are difficult to hack. They can include a mix of numbers, letters, and symbols. You can also try two-factor authentication, as it has proven secure among investors.
- Lookout for Phishing Scams – Remain alert on the calls, emails, or texts you receive. Cybercriminals aim to steal crypto investors’ information or install malware on their devices. They may even ask for your login details or keys while pretending to exchange representatives.
- Protect Your Private Keys – Do not share your private keys with anyone. If they fall into the wrong hands, your digital tokens will be in jeopardy.
- Track Your Account – Whether you secure your cryptos on an exchange or a digital wallet, ensure you constantly track your account’s performance for any suspicious activity.
What to Do if You’ve Been Hacked
If you discover that your digital wallet or exchange has been compromised, freeze your account. This will prevent any withdrawals while you figure out solutions. You can also move your digital assets to a more secure wallet. For instance, if you have been storing your assets in an exchange or hot storage. In this case, moving them to cold storage while conducting investigations may be the best option.
Additionally, report any malicious activity to your exchange or wallet provider. Doing so earlier may prevent further asset transfers. Your funds will be frozen on time, and you will get the best advice to secure your account moving forward. Other crucial actions include changing passwords and implementing advanced software to your account. Remember, if the hackers got access to your account once, the chances are that they will come back again.
Conclusion
Cryptocurrency attacks are here to stay. As an investor, you must learn how to handle these challenges while trying your luck in investments. The tips and tricks we have shared above will help you remain vigilant and take the necessary safety measures if need be. However, it is crucial to create a balance between strategizing for your investments and monitoring your account. This way, you do not give much attention to one element while overlooking the other. The goal is to succeed in crypto investments, which can easily happen with discipline, dedication, and patience.