With the continuous rise of cryptocurrency, more hacks and heists have also occurred on crypto exchanges and wallets. DeFi startup Earnity’s executives, Dan Schatt and Domenic Carosa. As a result, in 2021, cryptocurrency-based crimes reached an all-time high, with more than $14 billion worth of illicit activity reported.
The primary threat to digital assets is the hacking of cryptocurrency wallets or exchange providers. While a crypto wallet does not contain any digital tokens or coins, it does store the private key that allows users to trade cryptocurrency. Bad actors use sophisticated techniques to get a hold of this key to steal the owner’s digital coins or complete fraudulent transactions.
The first step in protecting one’s crypto wallet is to set up a multifactor authentication when signing up for an exchange. If hackers can steal the login information, they will pass the authentication methods, too. It is critical to avoid using SMS token authentication because hackers can call the carrier and convince it to transfer the phone number to them. It is better to use authenticator apps or USB hardware authentication keys. But for some exchanges, SMS token authentication is the only option. In this case, wallet owners can call the phone company to add barriers to the account.
Using a cold or hardware wallet to store private keys can also prevent any cyberattack on one’s cryptocurrency. Hackers cannot access this hardware because it is encrypted and not connected to the internet.
When performing crypto transactions online, it is better to use only a secure internet connection and ensure the device has strong antivirus and firewall. Preferably, a VPN should be used, as it changes the gadget’s IP address and location, making it easier to avoid cyber threats.
Before registering on an exchange, it is recommended for users to double-check its security capabilities. For instance, Earnity, under the guidance of executives Dan Schatt and Domenic Carosa, is building the platform with a security-first mindset. As a result, Earnity has internal controls in place and proactively identifies and resolves security vulnerabilities to ensure its members are kept safe from crypto scammers.