How to protect your cryptocurrency?

In these days, protect your cryptocurrency is very crucial with increasing cyber risks. in this article, you can learn how to safeguard your digital assets by using secure wallets, multi-factor authentication, VPNs, and the best crypto exchanges. discover the latest in cryptocurrency regulation to stay secure.

Despite the fact that cryptocurrency is seemingly invulnerable due to its cryptographic nature and the distributed ledger technology it uses (the so-called blockchain), where any transaction requires approval from other cryptocurrency holders, even the most popular types of cryptocurrency and crypto exchanges have repeatedly faced security incidents.

Here are the most recent and well-known examples: an attack on Japan’s largest cryptocurrency exchange Coincheck (2018, damage – $ 496 million); a robbery using a vulnerability in the Wormhole blockchain bridge (damage – $ 334 million); an attack on Sky Mavis’s Ronin Network blockchain platform (early 2022, damage – $ 540 million).

In each of these cases, cybercriminals first successfully hacked cryptocurrency exchanges and then the personal accounts of users, causing them significant financial damage. In all three cases, the attackers remained unknown and are unlikely to be caught anytime soon.

And while the losses in 2023 (for the year that’s not yet finished) were reported to be significantly lower, cryptocurrency security is becoming a growing concern among the community. It’s important for every crypto trader and crypto investor to be fully informed about crypto security and how to protect their crypto, no matter the size of their wallet.

Since most breaches and most thefts are avoidable, we’ve decided to create this guide for you to help you strengthen your crypto security. You’ll learn how to protect your crypto, how the crypto market is regulated (and what regulation changes are coming), and which crypto exchanges are the most reliable – at the time of writing.

Since most cryptocurrency crimes are preventable, we have compiled a list of tips to follow for both experienced traders and newbies buying crypto for the first time.

Beware of crypto scammers

While this advice may seem obvious at first glance, it is important to note that scammers pose a serious threat to those who are interested in cryptocurrency, especially beginners, as law enforcement agencies around the world are still struggling to control the spread of this type of crime.

Here are some examples of such scams: fake airdrops (a popular way of promoting tokens used by blockchain creators); phishing; various promotions on behalf of well-known exchanges in order to collect credentials; fake websites that offer a very good exchange rate and then simply steal your coins or credentials.

Use a reliable crypto wallet

This tip may also seem obvious, but a reliable wallet for storing your coins is the best way to keep your hard-earned digital currency safe from hackers. The cryptocurrency wallets have been divided into two main groups: “hot” and “cold”. The “Hot” crypto wallets are fully virtual and they are usually offered by the cryptocurrency exchanges.

They are more inexpensive and more suitable for quick transactions, and most suitable and easy to use, especially for beginners in cryptocurrency. However, due to its digital nature, these wallets are more vulnerable for online activity and for cybercriminals in general. That’s why, most cryptocurrency owners can opt for “cold” wallets. This is the physical device which is designed safely to store coins without help of an internet connection.

If you choose this method of storing cryptocurrency, we recommend that you take additional precautions. To restore a “cold” wallet in case of its theft or loss, you usually need to enter a seed phrase – a randomly generated sequence of 12-24 words or characters.

The seed phrase cannot be changed, so we recommend using a password manager (also called a password vault) to store it. Even if intruders hack the password manager, it is almost impossible to decrypt the data stored there. A password manager can also generate complex passwords (a sequence of 12-14 characters consisting of upper and lower case letters, numbers and special characters), in case you need to come up with your own code phrase.

Set up multi-factor authentication

Avoid using public Wi-Fi networks

When you transact cryptocurrency over public Wi-Fi (either online with a hot wallet or remotely with a cold wallet), you expose yourself to extreme risk, as such a connection can be easily intercepted by even the most inexperienced hacker. If you still need to transact on the go or while traveling,

we recommend using a virtual private network (VPN). A reliable VPN service, such as Kaspersky VPN Secure Connection , allows you to connect to the crypto exchange’s servers and/or enter a transaction into the blockchain through an encrypted digital tunnel. This tunnel protects your wallet and coins from potential threats coming from public Wi-Fi or an unsecured internet connection.

The service hides your IP address by redirecting it to a specially configured server operated by the VPN host. This server then becomes the new source of your data, preventing outsiders, including your ISP, from seeing what data you send or receive or what websites you visit. To learn more about how a VPN works, check out our article.

Existing methods of regulating cryptocurrency

The U.S. currently has a loose approach to cryptocurrency regulation. Financial regulators are taking serious steps to combat the rampant fraud in the space, and the Biden administration released a roadmap to reduce cryptocurrency risks earlier this year .

The U.S. government is generally seeking to treat cryptocurrency as a security and is attempting to regulate crypto exchanges rather than the coins themselves. However, no serious action has been taken so far: banks are not prohibited from offering crypto services, and crypto investors are still being scammed out of millions (and sometimes billions) of dollars.

The cryptocurrency community has been trying to regulate itself since 2014, when the Cryptocurrency Security Standards (CCSS) were adopted. Developed by academics, industry experts, and security specialists, these standards are intended to provide transparent criteria for assessing and comparing the security levels of different cryptocurrencies.

The community also hopes to reduce the risk of financial losses due to human error, fraud, and natural disasters. The standards cover the following 10 aspects of cryptocurrency security.

• Key Generation : How to Create and Secure Cryptographic Keys.
• Keyholder Authentication : How to verify the identity and authority of the keyholder.
• Using Keys : How to use cryptographic keys to confirm transactions and other operations.
• Powers of the Key Holder : What are the functions and responsibilities of the key holder.
• Key Storage : How to store and back up cryptographic keys.
• Key Recovery : How to recover cryptographic keys if needed.
• Key Compromise Policy : How an organization should respond to a suspected or confirmed breach of a cryptographic key.
• Number of Key Holders : How many key holders are needed to complete the transaction.
• Creating a Wallet : How to create and set up wallets to store cryptographic keys.
• Audit : How a cryptocurrency organization can monitor the security of its cryptocurrency and workflows.

For each of these criteria, three levels of compliance have been established: Level I – Basic, Level II – Standard, and Level III – Advanced. By adhering to these standards and achieving a high level of compliance, cryptocurrency providers and other organizations working with cryptocurrency will be able to bring much-needed stability to a market that is still considered highly volatile.

The latest ways to regulate cryptocurrency

We were already working on this article when Reuters reported that a key committee in the US Congress had put forward a bipartisan bill that would develop a major regulatory framework. The bill would legally enshrine the status of cryptocurrency as a security or commodity, strengthen the Commodity Futures Trading Commission’s (CFTC) oversight of the cryptocurrency sector, and reaffirm the powers of the Securities and Exchange Commission.

Which cryptocurrency exchange is the most reliable?

Choosing the most reliable cryptocurrency exchange is not easy, given the continuous development of the crypto industry, the volatility of the exchange rates of various currencies, and the instability of cryptocurrency exchanges. However, in the years since the creation of Bitcoin, a number of reputable and reliable exchanges have managed to gain a foothold in this often volatile market.

For those unfamiliar with how crypto exchanges work, we will explain: a cryptocurrency exchange is a digital trading platform that functions in much the same way as a brokerage platform. It allows you to sell and buy cryptocurrency from other traders and speculate on the difference in rates. Exchanges can be centralized and managed from a single corporate center (this is how a brokerage firm guarantees the security of its clients’ transactions) or decentralized.

Given the digital nature of cryptocurrency, a comprehensive security solution should be the foundation of your cybersecurity strategy, whether you are a professional trader or a beginner with small amounts of money. That is why we recommend Kaspersky Lab’s cybersecurity solution: Kaspersky Premium Plan .

In addition to award-winning antivirus software, our plan includes expert consultations, threat management, 24/7 technical support, and the ability to work privately and securely online. It is the perfect solution to protect your personal data and work device from any malware, allowing you to safely trade in any volume.

Conclusion: Safeguarding Your Cryptocurrency

Protecting your cryptocurrency involves a combination of secure practices and the right tools. Starting with a cold wallet, utilizing multi-factor authentication, and avoiding unsecured networks are foundational steps. Stay aware of new regulations and standards that can impact your assets’ security, and select exchanges with strong reputations and security practices. Whether you’re new to the crypto market or an experienced trader, safeguarding your investments is essential in this dynamic and high-risk digital environment.

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