[Written By External Partner]
The security of your cryptocurrency holdings is directly tied to the protection of your private key, which is essential for conducting digital currency transactions. Therefore, securing them in a reliable wallet becomes crucial. Consider the following top strategies to safeguard your cryptocurrency wallet from potential threats like hackers and bots.
In order to safeguard your digital assets, it’s crucial to house them in a ‘cold’ or hardware wallet, which is akin to a BTC to USD vault. You might require some of your crypto to be available online for transactions, but it’s best to only have readily accessible what you’ll need in the near future and keep the majority safely offline. A ‘cold’ hardware wallet, about the size of a USB stick, contains a private key that allows you to access your assets.
You are free to set your own private key, but if it’s lost, you could lose access to your investments. For instance, two investors recently forgot their hard wallet’s private key, even though their investment was worth millions. They had to enlist the services of a hardware hacker to breach their own crypto wallet physically and retrieve cryptocurrency worth $2 million.
However, if employing a private hacker doesn’t appeal to you, securely store your private key from the beginning. Never disclose your private key and store it in a secure physical location such as a fireproof safe or a safety deposit box for optimal security.
Storing most of your cryptocurrency with online providers presents a risk as they usually have access to your private key. In a cyber attack, if your private key is compromised, you stand to lose your investment. To further mitigate risk, consider maintaining multiple crypto wallets. This way, even if one private key is stolen, your other assets remain secure. However, this method entails the safekeeping of multiple private keys, which comes with its own set of challenges.
Multi-Factor Authentication (MFA) provides an advanced level of protection for your account by requiring multiple independent credentials, such as a password, security token, or biometric data. The principle behind MFA is a combination of “knowing and possessing”: you know your password and possess a token, push notification, or biometric data.
When establishing MFA, you typically have the choice between SMS or a two-factor authentication (2FA) app push notification. Generally, 2FA is a more secure option since if a perpetrator manages to acquire your SIM card, they can intercept the notification. Intruders often use SIM swaps as a method to access accounts unexpectedly. If your phone gets stolen, it’s crucial to contact your service provider immediately to deactivate your old SIM card. A sudden loss of data and phone services might be an indication that you’ve fallen victim to a SIM swap. To safeguard against such incidents, request your service provider to secure your SIM card.
A prevalent and easy-to-use bot is the one-time password (OTP) bot, which explicitly targets two-factor authentication (2FA), a security measure widely adopted by crypto owners and wallet users.
To orchestrate these cyber-attacks and pilfer cryptocurrencies, OTP bots gather pertinent information about their prospective victims, such as their crypto holdings, the storage location of their cryptocurrencies, and their geographical location. Upon obtaining this data, they access the crypto platform where the targeted individuals have accounts, posing as the legitimate account holders.
This action prompts the platform to dispatch a 2FA security alert to the actual account holder. This is when the bots come into play. They relentlessly call the account holders, assertively warning them that their account is at risk. They capitalize on their panic and bewilderment to coax them into divulging their 2FA code to the bot.
Utilizing a virtual private network (VPN) can act as a disguise for your internet activity, by modifying your IP address and geographical location. This confuses potential cyber criminals as it makes it more challenging for them to observe or follow your online activities.
Ensure you link your device to a trustworthy VPN when dealing in cryptocurrency trading or when accessing your cryptocurrency wallet. Refrain from logging into your crypto accounts via unsecured or public Wi-Fi networks.
Having an understanding of the ways in which criminals can use digital tracking to access your personal information is a critical knowledge to have, but more important is the action you take to prevent becoming a victim.