The cryptocurrency market has been all the buzz this year as the reigning cryptocurrency, Bitcoin, reached an all-time high price earlier in the year while alternative coins continue to enter the market. And in recent news, the El Salvador government has now legally declared Bitcoin as a legal currency. El Salvador would accept Bitcoin for purchases, bank loans, and tax payments, making them the first country to adopt a non-fiat currency. As interest and opportunities for cryptocurrencies continue to rise, so do the risks for scams and hackers.
The Federal Trade Commission recently announced nearly 7,000 reports of cryptocurrency scams since October 2020, and the average amount lost per consumer is roughly $1,900.
Cryptocurrencies still only exist digitally and are not insured or backed by the US government, so if your funds are lost or stolen, there’s no support or obligations from exchanges or third-party wallet companies to retrieve lost funds.
So what happens once the scammer has gotten your cryptocurrency? Any expert will tell you that it is simply gone. Anyone claiming otherwise is just another scammer or company preying on victims with promises of tracking down your currency and returning it.
Not all is lost. There have been cases where SNC has worked with multiple cyber insurance providers to protect your cryptocurrency investment. Working alongside these insurance companies, we have recovered over $50,000 in scammed cryptocurrency within the past 60 days.
You have to be proactive. We all know that scammers exist, but because they are a constant barrage of attacks, it only takes the right moment of distraction, and you can fall victim. Here are ways to protect your cryptocurrency and scams from looking out so that you can focus on sending your tokens to the moon.
Use a VPN for privacy. When you make a cryptocurrency transaction, your IP address is visible on exchanges and to your internet service provider. Thus, making it easier for scammers or malicious parties to track your financial transactions leaving you with little to no privacy. Most exchanges use HTTPS encryption, but using a VPN can add extra security, protecting you from malware and phishing attacks. VPNs hide your IP address, so every buy or sell transaction that you make remains anonymous.
Don’t use the same password. This may seem like a no-brainer, but with a vast number of cryptocurrency exchanges out there, you may feel tempted to use the same password across multiple accounts to keep it easy to remember. However, if even one of your accounts is compromised, this can place all of your accounts at a higher risk of being susceptible to hacking. Use strong passwords that aren’t common phrases or dates. The best rule of thumb: create a password with a string of random letters, numbers, and symbols.
Duo-authentication. Most cryptocurrency exchanges offer a two-factor authentication option that requires verification each time you make a transaction or at the time of login. Enabling an authentication code sent to your device provides added protection.
Keep it offline. Securing your cryptocurrency should be your priority when choosing a wallet. Most exchanges can hold your balance within the platform. However, your cryptocurrency is vulnerable and at higher risk for theft. Digital or hot wallets are off exchanges but remain online and run the risk of hacks, or if a wallet is deleted, the coins could also be gone for good if recovery phrases are lost. Cold wallets are physical hardware wallets that remain offline when unplugged and are undetectable from hackers, making them the safest option for cryptocurrency storage.
Spot the scams before you fall for one:
- Look for claims that offer guarantees, promise high rewards, or use celebrity endorsements. One tell-tale sign is if a scammer asks you to pay with cryptocurrency or gift cards and promise free money in return.
- Mobile phishing: Scammers pose as legitimate cryptocurrency exchanges with a link in a text message claiming an issue with your account or that a payment needs to be made.
- Look out for fake exchange websites and mobile apps. Always ensure that web addresses are correct and check the legitimacy of apps upon downloading, such as brand colors, logos, spelling, and grammar.
- Beware of hardware manufacture sending warnings of required patches to resolve a newly discovered exploit. Do your research, Do Not automatically update your device’s firmware or software from a link embedded in a text or email. Ledger was severely compromised last year from this type of attack.
Know which scams to be aware of and standard practices to keep your cryptocurrency safe from theft or scams. You can only be proactive rather than reactive.
You don’t have to be an MSP client to work with us. We can help you set up the proper cybersecurity for your investment needs.
Request a free consultation with Strategic Network Consulting (SNC) to learn how to keep your tech working seamlessly and IT drama-free.