Proven Tips To Secure Your Crypto Investments From Thefts And Scams

At the global level, cryptocurrency scams rose by 81 per cent in 2021, orchestrated by rug pulls which saw victims losing over $2.8 billion

By
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Indians are investing heavily in cryptocurrency despite its extremely volatile nature as well as uncertainty over its acceptance as a legal tender. Several studies revealed people visit scam websites that leverage cryptocurrency because of its decentralized nature. These scam sites trick people of their hard-earned money. While India attracted over $638 million in blockchain investment and crypto funding in 2021, data from Livemint revealed that Indians also accessed crypto scam sites more than 17.8 million times as of 2020; and 9.6 million in 2021. This has been a hard nut that needs to be cracked for regulators as crypto fraud begins to rise in India.

Pixabay

At the global level, cryptocurrency scams rose by 81 per cent in 2021, orchestrated by rug pulls which saw victims losing over $2.8 billion.

Crypto scams are not only limited to rug pulls, there are phishing websites created to steal sensitive information by offering fake airdrops, Ponzi schemes, and other fake investment plans. In the case of a rug pull which is popular, a scamster will launch an initial coin offering (ICO) just like a legit IPO to attract investors. The Decentralized Finance (DeFI) ecosystem has witnessed more pulses whereby the developers drained the liquidity pool of funds, drove the coin's value to zero leaving the victims with sawdust in their wallets.

Ways to keep your account secure

With the popularity of cryptocurrencies and the growing pool of investors investing in them every day, securing one crypto account has become more important than ever due to the activities of hackers. And knowing how to keep your accounts secured would not only protect you against malicious attacks but also protect your investments. You will see how to secure your accounts in the following:

Use two-ways authorization to your crypto wallet: Using two-way authorization gives an additional layer of security to your crypto wallets as a direct bridge into the account will not give any access unless they give a second authentication. There are trusted apps to help you set up this two-way authentication, like; Duo Security or the Google Authenticator. The apps are more effective than SMS-based 2FA authorization. However, if the SMS-based authorization must be used then, make sure it is set in a way that an SMS is sent to your device on every new login; this is just in case persons other than you have access to your device's password or the crypto wallet account is compromised.

To secure your crypto safely, you must not rely solely on the SMS or OTP verification that will be sent to your device, as your phone details can be hacked and cloned to other devices. Saving sensitive information about your wallet like the recovery of seed phrases in a protected offline location is very important too. Individuals must make sure their email accounts are secured, especially the linked forgot-my- password backup email accounts.

Diversify your assets: Rather than putting all eggs in a basket, you can spread out your investments. Let's say you have $100 worth of assets in an account, it is ideal to break it in halves like 50/50. This is so that you don't lose everything when there is a bridge into one of the accounts by hackers. It's just the same way as having different bank accounts, to spread out your funds to dispel unwarranted attention that may lead to threatening the safety during an online transaction. We take those cautions so as not to fall at risk when our bank detail is compromised. And according to the CEO and co-founder of Mudrex, Edul Patel, the same caution as the bank account online transaction is needed while carrying out any crypto transaction, to avoid being scammed.

Keep your devices safe: Always scan your devices for any vulnerability and update all security features regularly. Endeavor to use updated and powerful antiviruses as well as firewalls to enhance device securities. Use the National Cyber Security Alliance antispyware to scan your device for suspicious activities regularly. Yet also, according to the National Cyber Security Alliance; all crypto-based activities should be on one device and one must keep their work devices as private as possible, using dedicated IPs with non-public servers that keep activities, locations, and name coded.

Utilize hardware wallet: This is one of the most secure ways if not the most secure way of keeping crypto safe. It is called Cold Storage. It functions just in a similar way as your physical wallet where you put your cash but this is digital and even more secure than the physical wallets one may carry around. They are designed to operate off the internet through dedicated storage in computers, pen drives, or hard drives. They are backed by cyber security experts to keep your sensitive details offline, so that your cryptos are inaccessible to anyone other than you. To access it, you need to generate a set of secretive keys which you must keep offline and safe. According experts, the wallet is secure with 4-8 characters and if it fails after several attempts, it will automatically erase itself, to prevent theft. But, if you forgot the seed keys as well as the drive, it will be impossible to retrieve the password. For these reasons, users prefer hot storage where they store their cryptos directly in wallets online.

Make use of a password manager: Passwords must be such that they are difficult to guess and cracked. The recommended password length is 16character and mixed with symbols, numbers, and alphabet to improve password strength. However, we may be poised to use passwords that can be easily remembered, which sometimes may not be strong enough and can be vulnerable to hacking. But, with password managers such as Dashlane and 1password, we don't have to worry about remembering or forgetting passwords because they are stored securely in the managers and it will always remind us when we forget.

Have control over your wallet: All wallets have their unique keys and they are revealed to an individual each time a new wallet is created. It is often advised to key those keys offline to avoid being accessed by hackers which may guarantee them to have access to your wallet.

Six-point safety tips you must observe investing in crypto

According to the founder and CEO of Bitbns, Gaurav Dahake, he advised that the following tips must be observed while investing in crypto.

  1. Keep login details secret and avoid sharing them with anyone
  2. Beware of too good to be true promises to lure you into any crypto investment even though they are big crypto exchanges
  3. It is best to save login keys and seed phrases offline.
  4. Have thorough research about the Tokens you want to invest
  5. Use multiple authorizations on your wallets
  6. Be sure to check for the type of security features available for you on a platform before investing through it.

Some common red flags to note before investing

  1. Enticing offers that can hardly be true
  2. Scammers in the guise of influencers
  3. Typographical errors in link
  4. Fake promises

Steps to take to avoid being scammed

Do not take info at face value; be thorough about any information dished out to you and ascertain the degree of fact about anything told about any investment. And be very cautious about juicy offers that are just too fluid to be true.

Be sure that you are clicking on the correct link; hackers and cybercriminals alike are relentless in trying to devour their victims and they have found ways to lead you to sites that could send bugs into your devices to extract vital data. Also, the site could be a scam in the guise of investment where they lure you to invest. After accumulating some amount and about to withdraw they will demand certain fees. They are about to carry out these acts because the links they send out are almost similar to the original link and that is why individuals must know the correct links to sites before clicking

Look at what others have said about the investment; there are chances that before investing, people must have made an attempt or have invested in that particular investment. So, hear what they have to say on the reviews and read as many reviews as possible to know if such investment is real and what the negatives are. Also, look at things like customer services and how the company helps their clients to attain success.

Be educated before investing; before investing, it is always advised that investors do comprehensive research about the crypto type they want to invest in. They should know the risk factors associated with the investment, its volatility, and how it is affected by market sentiment in trading.

Note: Investment in cryptocurrency is subject to risk and readers should do their own due diligence. Entrepreneur Media does not endorse any such investment.