Year after year, cryptocurrencies are becoming more and more popular among investors, despite the sometimes turbulent environment of the industry as a whole. But as this popularity grows, so does the need to ensure that such assets are protected to the highest level possible from malicious actors. Moreover, not only users, but also the management of cryptocurrency platforms, to which their clients entrusted their assets, need to worry about compliance with crypto-security measures.
Phishing is a type of cyberattack in which an attacker masquerades as a trustworthy entity in order to obtain confidential information: login and password to accounts where cryptocurrency is stored, or a private key to a cryptocurrency wallet. For this purpose, fraudsters may pose as representatives of law enforcement agencies or employees of the cryptocurrency platform.
Depending on the technology used, phishing can be categorized into several types:
- email phishing – the most “popular” type of phishing among cryptocriminals, which involves swindling a user’s personal information via email to supposedly prevent account blocking or to receive a reward;
- phishing on social networks – similar to the previous type of fraud, with the only difference being that fraudsters write to users from fake pages of well-known cryptocurrency exchanges on Facebook, Instagram and other social networks;
- smishing (from SMiShing) – phishing by sms;
- vishing (from voice phishing) – a phone scam where cybercriminals attempt to obtain personal data during a phone call.
Fake cryptocurrency exchanges
Some cybercriminals may create fake websites of major cryptocurrency exchanges and other platforms. They register a website address with a similar name (usually with a difference in one letter, case or domain) and copy the design of the platform to buy the trust of novice traders.
But the unscrupulousness of the site’s creators can be signaled by guarantees of high income, as well as promises of low commissions and generous gifts for registration.
To avoid becoming a victim of fraud, you should carefully double-check the address of the site where you are going to enter your personal data. In addition, it is not recommended to enter your password and login on sites without HTTPS protocol, which protects the connection and encrypts the data.
Cryptopyramids and Ponzi schemes
One of the classic fraudulent schemes that appeared long before the cryptocurrency world was born, but is used in it as well, is a Ponzi scheme. Because of its structure, it is also called a pyramid scheme.
Participants invest their own assets in the project under the guarantee of their multiplication, but in fact they receive income solely due to the investments of new participants. Therefore, they are interested in attracting as many new people as possible, who become new victims of the scam.
However, the final result of such pyramids is always the same: at a certain point they are bound to collapse, and their developers disappear. Participants not only stop receiving “guaranteed” payments, but also lose the money they invested.
How to secure your crypto coins?
When a reliable cryptocurrency platform, which is not afraid to entrust your bitcoins (or any other virtual assets), still managed to find, you should not forget about the safety of your cryptocurrency. You should think about it at the registration stage.
So, first of all, it is necessary to come up with a strong password. For example, when registering on WhiteBIT, a simple password will not work – the site has a number of requirements: it must contain not only letters (both uppercase and lowercase) and numbers, but also special characters (for example, !, #, @ or %).
In addition, the site’s customers can retain control of their data with proven and common cybersecurity measures such as:
- AML verification;
- KYC verification;
- 2FA (two-factor authentication).
It is an international standard for combating the laundering of illegally obtained funds. AML (Anti-money laundering) includes a set of measures and laws, in particular the verification of a cryptocurrency address for involvement in illegal activities.
It is important to note that the blockchain always stores data on all transactions with cryptocurrency. Thus, traces of “dirty” coins can be found in any wallet in which they were stored.
WhiteBIT clients can protect their assets and address with AML verification of the address of the recipient or sender of cryptocurrency. This service costs 1 USDT (but WBT exchange native token holders get free checks daily), and the result will be instant. You can do it in the AML tab (section “Advanced”), specifying the address of the wallet of interest and clicking “Verify”.
While anonymity is considered one of the principles of blockchain technology, cryptocurrency exchanges that aim to provide a safe space for financial transactions adhere to KYC regulations. This is part of AML, which is all about verifying the identity of users.
This allows cryptocurrency transactions to be regulated and contributes to their transparency. In addition, it is thanks to KYC that the exchange can fight fraudsters, so the presence of this tool shows that the platform cares not only about its own reputation, but also about the safety of users.
The protection of data and assets with only a login and password is considered a rudiment in cyberspace. For this purpose, two-factor authentication – a way to verify a user’s identity through two different confirmations – has long been used.
Depending on the importance of the information, 2FA can use different technologies: SMS, phone calls, e-mail, biometric data (fingerprint scan, retina scan) or third-party programs. For example, Google Authenticator mobile application.
After a WhiteBIT user binds it to his account, each time he authorizes, the Authenticator will receive a password that must be entered on the exchange’s website. New keys are generated every half a minute, so it is impossible to steal or forge them.
Thus, thanks to the implementation of many different measures to protect user data, WhiteBIT can be called an example of a site with high crypto-security standards.