Fraud is rampant when it comes to cryptocurrency trading and things are only getting worse. One agency found that reports of crypto-related fraud jumped by 116% from June 2020 to June 2021.
One of the reasons why cryptocurrency fraud is becoming more common is because more people are involved in trading. Cryptocurrency also tends to be more anonymous. This can be great in some cases, but it can also mean that you will have no recourse in case someone steals money from you. This is why you need to be very careful about how you handle cryptocurrency online, especially when trading. Here are some tips crypto traders can do to protect themselves from fraud.
Use a Good VPN
The first thing we suggest you do is that you always use a VPN when trading. In fact, use a VPN whenever you’re online. One of the reasons why this is so important is because crypto traders are routinely subjected to phishing attacks. Using a VPN will mask your IP address and protect your personal information.
You should also use a VPN if you’re intending to trade over a public connection. These are not safe and anyone from hackers to even administrators can steal your credentials by hijacking your connection. So, if you want to be able to trade while you’re at a coffee shop, restaurant, or airport, you need a VPN.
If you’re looking for a great VPN for trading, you can read more here on TurboVPN. Top10 reviews one of the most popular and efficient VPNs on the market and how it compares with other VPNs out there. You’ll also learn some of the things you should know before picking a VPN.
Never Leave Your Money on an Exchange
One of the worst mistakes that you could make as a trader is leaving your funds on an exchange. When you’re doing this, you’re pretty much giving them ownership of your cryptocurrency. This means that you will get in trouble if someone ends up hacking the site or if the site vanishes off the map. And, if you don’t think this can happen, you should look up what happened with QuadrigaCX back in 2019 when the owner died with the private keys to the exchange’s vault.
You absolutely need to find a good wallet before you even start investing. There are two main types of wallets that you can buy. You can get a physical wallet that will store your crypto off the grid, or a software-based wallet that you can install on your PC, tablet, or phone.
If you want the most protection, get a hardware wallet. Cold wallets, as they’re commonly referred to, are the safest way to store crypto since they are disconnected from the network and almost impossible to access. You will, however, have to find a way to protect that wallet. You can do so by placing it in a vault or a bank deposit box.
One thing with cold wallets is that they’re not the most convenient, so buy a few and divide most of your assets between them. You can then keep a small amount of crypto in a software wallet for everyday purchases and small trades.
Make sure that you pick the right software wallet, however. Look into its encrypting technology first and make sure it’s reliable. This is the only way to ensure that back actors will not be able to decipher your private key.
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Choose Your Exchange Wisely
Be very careful when picking a cryptocurrency exchange. There are so many different exchanges today and new ones pop up every day. This is why we suggest that you go with one that has a long history. This is something you’ll be able to find out quickly after checking a few reviews and seeing what the community has to say about them.
The exchange needs to have systems in place to protect people’s assets. You need to make sure that a good portion of the assets are stored in cold storage and know what they’re doing to protect them. Make sure that they have several layers of protection on accounts. You need things like two-factor authentication, and to be able to set your own security level on your account.
Never Give Info Over the Phone Or Email
Never submit sensitive information through phone or email. If you get an email or a phone call stating that there’s something wrong with your account, log in first to see if it’s congruent with what you see. You should then call or contact the exchange yourself to see if it’s true.
These are all things that you can do as a crypto trader to keep yourself safe. Be careful whenever you’re online and take the steps necessary to protect your assets.
