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5 Ways to Protect Your Crypto Accounts From Fraud

No one should be surprised to learn that crypto fraud now ranks as the second-highest form of fraud crime in the U.S. While consumers have only been using cryptos as a viable means of exchange for a few years, it’s noteworthy it didn’t take the criminal element very long to make crypto wallets their favorite playground.

When discussing crypto fraud, it comes in two general forms. First, rogue merchants are taking advantage of customers by siphoning off a little extra crypto when processing transactions. Second, criminals are perpetrating fraud through the actual exchange of the digital assets themselves. This means hacking.

The biggest issue facing crypto investors is the very nature of how cryptocurrencies work. If fraud is perpetrated, there is very little the victim can do. The platforms are decentralized, leaving no one accountable. No one can reverse fraudulent transactions. Crypto exchanges use codes in place of names, which makes all parties anonymous. Finally, many transactions are flowing back and forth, creating too much activity to track.

Given the problems created by crypto fraud, you need to take responsibility for protecting your crypto assets. Here are five suggestions.

There have been a number of instances of users buying cryptocurrency on exchanges only to find out that their assets have been slowly sold off over time. One instance of this was when a hacker got access to an exchange’s administrator account and sold off over 2,500 BTC. This led to a sharp decline in Bitcoin price. With the BTC’s price at a strong level, it’s incredibly important to check your exchange’s history of security and privacy before you choose to start trading there.

Your wallet passphrase and code keys are the only way to access your crypto wallets. You cannot afford to let anyone get access to them or your coins will likely disappear. You need to store this information in a safe place that no one else can access without your permission.

By now, you have likely gotten used to the idea of not opening suspicious emails or linking into websites you know nothing about. You avoid these things to keep criminals from getting access to your personal information. The same rules apply to ads and spam that will come through your email account regarding your crypto wallet and investments. Don’t click on something that looks suspicious.

2FA stands for Two-Factor Authentication/Multi-Factor Authentication. As it relates to your crypto exchange, anyone trying to access your wallet would need to go through at least two authentication processes to gain access. You need to use this technology to make it difficult for criminals to gain access to your crypto exchange.

After hearing stories of how much people are making by investing early in new coins, you are apt to get careless and jump into one without doing the proper research. There has been a rash of bad ICOs coming into the market in recent years. If you want to take a shot at a new coin, at least have the discipline to thoroughly research the background of the people offering the coin before investing.

5 Ways to Protect Your Crypto Accounts From Fraud

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