How to Protect Your Crypto Exchange Account From Hackers
If you are new to cryptocurrencies then security is the most important part you should take care of. The never-ending game of catch-up with the rules and the skyrocketing number of scammers dreaming up new ways to get their hands on people’s private accounts is only complicating the matter.
Use strong authentication features and enhance your account protection using robust authentication methods.
Make sure you are using trusted and secure connections whenever you carry out any online activity.
Use strong and unique passwords to help protect your accounts.
Diversifying Your Asset Storage
Reduce risk and increase asset security by diversifying the storage of your assets.
FAQ: Get answers to questions you might have about the topic.
There are a few things you need to take into account in order to secure your crypto funds. One of the most important steps in securing your exchange account is to enable Two-Factor, or 2FA, authentication. If you’re not familiar, this process asks you to input a password and verify your login, usually by entering a code sent to your phone or email. It's often taken a few extra minutes before signing to your account, but these added steps are well worth it in order to provide additional protections for your account.
Some of them are one-time codes via SMS or email, authenticator apps, or hardware keys. Which of these you like best is up to your preference, but there is no denying that each is great for securing your assets.
Use a Secure Internet Network
Always use an encrypted, trusted network for secure transactions, preferably on your home network. Public Wi-Fi hubs — at cafés and airports — render you a cyber malefactor’s prime target. Since these networks are public, they have very little security which further increases the likelihood of sensitive information being exposed. If a private connection is not possible, set up a Virtual Private Network (VPN) to mask your data with encryption and protect your online footprint.
Create Complex Passwords
We know how much we all hate every long and complicated password, but they are very important and can’t be underestimated. Your account password is your first line of defense, so approach it responsibly. A strong password needs uppercase and lowercase letters, numbers and special characters. How random the combination is, is how difficult it may be for a potential hacker to break into your password.
Steer clear of things like birthdays and names, or stringing numbers together. Try not to use passwords that can be traced back to your personal life at all. If you're having a hard time, you might turn to a password generator. Be sure to write down your password in a safe place, that you also won’t lose.
Use a Password Manager
Another alternative is to use a password manager for all of your passwords in one place. Often, a password manager is also a password generator, and after you have decided on your password, it can manage all of the saved passwords.
Ensure Separation While Backing Up Seed Phrases
Seed phrases act in much the same way as passwords — or security questions — but are often more important in ensuring the security of your account. Seed phrases are the words that are used to recover and access your cryptocurrency wallet in case you lose your device or forget your password. And that is why, as you would with any private data, you should do whatever you can to keep your seed phrases in a secure place — offline, ideally, in a physical document that you can accurately store away.
Maintain Multiple Wallets or Consider Using a Hardware Wallet
But seriously, while this sounds like a lot of hullabaloo, you need to check out splitting your crypto into multiple wallets. It helps you spread your assets wisely, reducing the risk of losing everything in case a single wallet gets compromised. To strike a balance between security and accessibility, split up between “hot wallets” you use for daily trades and “cold wallets,” where you store cryptocurrency for safekeeping. “Cold wallets” — meaning offline wallets — would probably be the wiser choice. One of the most infamous cold wallet, especially for beginners, is a hardware wallet. Hardware wallets, unlike their software counterparts, aren’t connected to the internet and less susceptible to hacks or phishing attacks. These features are highly valuable for people who own high amounts of crypto or want to store their funds long-term. Most hardware wallets are further protected from Internet access. For anyone with a substantial amount of cryptocurrency, a hardware wallet can be worth the investment, in addition to, or instead of, other options.
Follow all KYC & AML Rules
A crucial aspect of keeping your crypto safe is to comply with your regulations. This also covers Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. They ask users for their identity authentication. These checks, known as KYC, are mandatory for all companies, crypto exchanges included. These checks usually confirm your identity by requesting ID or similar personal information to guard against potential fraud. AML refers to regulations for monitoring and preventing unlawful activities such as money laundering. These regulations make it much more difficult for criminals to fake their identities and fraudulently access your account, and provide you with enhanced account recovery options.
Never Share Your Information With Anyone
You need to take great care of your private information to secure your assets. Scammers will impersonate companies or exchange providers in order to gain your trust, and so it is often advised to stay vigilant by keeping your personal information private.
With cryptocurrencies becoming more popular and asset protection measures more sophisticated, scammers continue to come up with new ways to get users to give up their personal information. This reminder seems the most obvious, but it can’t be stressed enough how critical it is to keep your personal information private. Potential threats can take forms of variations on phishing emails, social media messages, fake websites and other methods used to retrieve sensitive information.
How frequently do I need to update my password?
Some platforms, like Dropbox, which you might visit infrequently, will automatically remind you to change your password every few months, but this is not a universal practice — yet it is a very useful one. For the safety of your account, you may well be re-boosting passwords every 3–6 months. Changing your password regularly limits the window of opportunity for hackers when and if your password has been compromised.
When it comes to wallets: why use more than 1?
Using multiple wallets — and especially different types of wallets, like a combination of “hot” and “cold” — is one way to strengthen security protections. This is because if one of the wallets becomes compromised, the others will probably be intact. Lastly, employing multiple wallets may let you allocate your assets according to their intended use — for example, active trading or long-term hold.
How do you know a cryptocurrency exchange is secure?
There are multiple factors that help you verify how secure a crypto exchange is. Some of them are:
They are secured with SSL encryption, which means that the data between your browser and the exchange is encrypted, and thus, protected.
Any weaknesses that need to be addressed are identified through frequent security audits.
Using a technique known as “cold storage” which refers to storing the users’ funds offline to make hacking much harder.
Overall reputation includes reputable sources assessment, user reviews, and a history of security breach.
The transparency of operations and clear privacy policy.
Clarity on insurance policies or protective measures for safeguarding assets.
Should I keep all my crypto on an exchange?
It’s primarily safer to store only the amount you plan to trade on an exchange. For long-term storage, you may consider using multiple wallets, including hardware wallets, to minimize risk in case of an exchange hack or technical issue. Diversification of your storage mitigates the potential harm from a single point of failure.
If your exchange account is hacked or you lose access to it
Each exchange has a slightly different account recovery process.
The first step typically involves the fastest route to recovery by using the email or phone number associated with your account. Transactions need to be set up through the exchange website by requesting a password reset or an account recovery link. You will often receive an email or message and be instructed to follow the instructions.
If all else fails, if the rules appear unclear or recovery efforts are impossible, there will always be a contact channel — be it a website, message app, email, whatever — through which you can ask for help. Provide all necessary information, including your public account information, recent transactions and everything else that may help to speed the process up.
How can I monitor my account for suspicious activity?
Watch your account closely for any unauthorized transactions or log in attempts. Even better, if that's an option, turn on real-time alerts by email or SMS to immediately slam the brakes on suspicious activity. If you notice anything off, don’t wait—contact customer support immediately so they can prevent your account from being compromised.
Nordom does not guarantee the reliability of the content of this site and shall not be held liable for any errors, omissions, or inaccuracies. The opinions and views expressed in any articles are solely those of the author(s) and do not reflect the opinions of Nordom or its management. The information provided on this website is for informational purposes only, and it does not constitute investment, financial, or trading advice or an endorsement of any of the products and services discussed. A qualified professional should be consulted prior to making financial decisions. Please visit our Nordom Website Policy to learn more.
