Cryptocurrency is a digital asset that can circulate without monetary authority like a government or bank. It’s an alternative form of payment created using cryptographic techniques that allow people to buy, sell, or trade digital currency.
Since exchange rates are highly volatile, cryptocurrency has the potential to yield significant returns for investors. However, since cryptocurrency is a technology-based digital asset, hackers can hack it as with other digital assets.
Moreover, as more people invest in cryptocurrency, it becomes easier for hackers to use various methods to steal sensitive data and crypto assets.
Given that investing comes with a few risks, below are the common cryptocurrency cybersecurity risks and the preventive measures you can take to avoid them.
1. Hackable trading platform
While cryptocurrency is widely known for its transparency, it’s also well known for being vulnerable to crypto exchange hacks. Cybercriminals tend to target crypto exchanges because a single data breach could allow them to steal thousands of users’ assets.
So, when hackers compromise a crypto trading platform, the users could lose their funds due to cyber theft.
Notably, when it comes to the trading platforms that suffered from security breaches, take AscendEX as an example. It’s one of the victims of hacking due to a compromised crypto hot wallet with over USD$80 million worth of cryptocurrencies stolen.
With that in mind, security must be your primary consideration when choosing a crypto exchange to minimise the risk of losing your crypto assets.
Choose an industry leading crypto trading platform that utilises advanced security features to protect you from fund and data theft. It’d also be better to choose a trading platform that allows you to download the full report on your tax quickly and easily based on a particular period you select.
Alternatively, you can also consider spreading the cryptocurrencies you buy across multiple crypto exchanges instead of just sticking to one platform to ensure you don’t lose all your crypto assets at once.
2. Crypto phishing scams
Phishing is a social engineering attack that cybercriminals use to steal funds and sensitive information like credit card numbers or login credentials of targeted individuals.
This cyber type of cyber-attack happens when a cybercriminal, faking to be a reliable and reputable entity, tricks a victim into clicking an attachment, filling out an online form, or clicking a link. In particular, when it comes to crypto phishing attacks, hackers target crypto wallet private keys.
They send emails to bait their target individuals into clicking a malicious link that drives them to an online form, asking them to put their crypto private key information. Once hackers successfully get the information they need, they can finally get the cryptocurrency in those crypto wallets.
Accordingly, keeping your crypto wallet keys private is the best way to protect yourself from phishing attacks. If it’s your first time using a crypto wallet app, send only a small amount to confirm the app’s authenticity.
You should also do your research before investing, especially if you’re uncertain about a particular cryptocurrency.
3. Crypto malware
Crypto-malware is malicious software that cyber criminals install on victims’ devices. Once they’re successful in doing so to their target individuals, it allows them to mine cryptocurrencies secretly using their victim’s computing power.
This type of cybercrime is also known as ‘cryptojacking.’ As with other malware, cybercriminals usually deliver crypto-malware as an email attachment which may be executable software disguised as documents.
They may even use social engineering tactics to trick their victims into downloading and executing malicious files, similar to phishing attacks. But apart from sending it as an email attachment, hackers may also deploy crypto malware through malvertising or malicious landing pages.
Although it’s challenging to detect when there’s crypto malware in your computer system, there are several preventive measures you can take to protect your crypto assets.
4. Third-party applications risk
Crypto third-party apps refer to applications created by somebody who doesn’t manage the trading platform you choose.
Although third-party apps enable you to monitor crypto prices and calculate potential profits, giving them access to your information can pose a potential risk to your security and privacy.
In particular, one of the potential risks that these third-party apps can bring to you is a data breach wherein they may expose your sensitive or protected information to others without your permission.
What’s even worse is that when a third-party app causes a data breach, the effects of this problem can be a permanent issue for your finances.
So, to ensure your security and privacy, refrain from downloading applications that your trading platform doesn’t control. Using a VPN can also help mask your legitimate location and protect your personal information online.
Overall, even though cryptocurrency comes with a few risks, you can still do something to protect your assets from those cyber threats by implementing proper preventive measures and being careful with the websites and applications you use.
It’d also be wise to use multi-factor authentication for additional security against potential cyber attacks.