Secure your cryptocurrency trading experience with these tips
In recent years, individuals seeking to diversify their portfolios (including institutions) are turning to cryptocurrency to potentially increase profitability. Bringing a plethora of benefits which include efficiently facilitated transfers, secure storage, and competitive fees, cryptocurrency is steadily gaining attention as the next mainstay in the financial market.
As with every form of financial trading, there are vulnerabilities associated with cryptocurrency. Lack of regulatory oversight, price volatility, and susceptibility to fraud to name a few. Equipping yourself with the right knowledge on how to protect yourself within this upcoming market is key to enjoying a smoother trading experience.
Here are some of the measures that will help enhance security and enable you to invest in cryptocurrency with confidence:
1. Secure connections are key
The first pillar of transacting in any form of digital currency is to ensure that you’re using a secure connection. While the basics of sticking to a trusted, secure connection apply, VPN (Virtual Private Network) services are another such way to heighten online security and privacy. VPNs are essentially networks that create an encrypted tunnel for data including your digital assets account information, IP address, location, and passwords when you access the internet
Here is a checklist you can tick off to ensure your Wi-Fi connection is protected:
- Change the preset username of your Wi-Fi
- Ensure WPA is active (Wi-Fi Protected Access)
- Use a unique wireless network password (a mixture of digits and letters)
- Partition a guest network when possible
- Keep router updated
Also, as much as possible, avoid public Wi-Fi networks as intruders can intercept your connection and acquire the information you transmit, on top of distributing malware easily.
2. Passwords are not permanent
Changing passwords is often overlooked when enhancing account safety. Cyber theft incidents have been known to occur from a lack of scrutiny to password security.
Following are some instances that prove changing passwords regularly can be beneficial:
- In the event of device theft or loss, saved password information will be irretrievable.
- Account access time will be limited for unauthorized cybercriminals.
- Using unique passwords for individual accounts will minimize the risk of account breaches when compromised databases with passwords are revealed in plain text.
- Renders hackers’ lists of cracked passwords outdated
The rule of thumb is to change your passwords every three months according to cybersecurity experts. However, do not delay the process if you suspect your account or passwords may have been compromised.
Additionally, create strong passwords to keep hackers at bay. The key features of a strong password are:
- A mix of letters (upper and lower case), numbers, and symbols
- Substantial length (at least 16 characters)
- Avoid sequential numbers or letters
- Avoid personal information linking back to you
- Avoid common words/phrases
Password management software (e,g. 1Password) is a great tool for creating and storing passwords securely for easy retrieval. Not only does it inform you if your passwords are weak, reused, or leaked, it also requires you to unlock a master key that you can enter offline. Remember to create a strong and unique password to protect the rest of your passwords from unauthorized access.
When it comes to password security, the idea is for it to be easy and secure for yourself to access, while making it difficult for hackers.
3. Two-factor Authentication bolsters security
Two-factor Authentication (2FA) adds a layer of security to account log-in processes by requiring an additional form of authentication — such as providing a code sent via push notifications to your mobile device, email, authenticator apps, or biometric identification methods (fingerprint/facial).
Beyond just the username and password combination, hackers would also need to get a hold of the code most commonly sent via short message service (SMS). However, SMS is an inherently insecure medium of communication as hackers can easily gain access to your messages through “SIM hijacking” — the process of a person impersonating you as they contact your mobile carrier to assign your number to a new SIM card.
As such, it is advisable to utilize an authenticator app where time-based one-time passwords (TOTP) are auto-generated and expire within a few minutes. TOTP has as an additional feature of creating a code on your device, rather than through a network that can be easily penetrated. To cybercriminals, this is an additional hurdle and could potentially deter any malicious attempts to access your accounts.
When setting up cryptocurrency accounts (first and foremost via a trusted exchange), opt for a platform that offers 2FA for log-ins, deposits, withdrawals, and other trading-platform-specific functions.
4. Stay updated with cryptocurrency incidents
Despite the disruptive power of blockchain technology, cryptocurrency activities on trading platforms and exchanges are still susceptible to cybersecurity incidents — giving a rise in the prevalence of crypto-related crimes in recent years.
In 2021 alone, US$14 billion worth of digital tokens were misappropriated through illicit means. Such incidents include scams, phishing attacks, exaggerated promotions, and even Ponzi schemes.
However, these should not be a deterrent from attaining your growth objectives through cryptocurrency. You can protect yourself from falling prey to such occurrences by staying abreast of different fraudulent behaviors and recognizing early telltale signs. Here are some pointers to look out for:
- Spelling, grammatical, and typographical errors
- Requests for personal information such as login details and passwords
- Demands for urgent attention and actions to be taken
- Suspicious email addresses, links, and domain names
- Overpromising claims to multiply cryptocurrencies
- Contractual obligations that prevent the sale of cryptocurrencies
- Plea to send coins for address validation
- Spoofed accounts of “influencers” and “celebrities” endorsing cryptocurrencies
- Dubious attachments
- Unknown hyperlinks
- Persistent marketing push cluttered with images and hyperlinks
5. Reputation matters
When considering a crypto exchange or a digital assets specialist, assess the reputation, credibility, and trustworthiness of the said company. They are as equally important as the fees, list of assets available, products, and services offered. You can refer to this guide which encapsulates a slew of metrics to take note of when selecting a digital assets partner for your needs.
6. Stay informed about the processes in place to protect your digital assets
Due to the unregulated environment of cryptocurrency, the exchange or digital assets specialist you work with must be able to provide you with details on how your assets are secured. Whenever possible, seek to understand more about the measures that are in place. It will help you gain a more keen sense of how cybersecurity functions within the cryptocurrency market.
Here are some important factors for your consideration:
- Licenses such as a Payment Services (PS) Act to regulate Digital Payment Token (DPT)
- Client onboarding screenings such as Know Your Customer (KYC) and Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT)
- User-level protection such as 2FA
- Whitelisting of wallet
- Maintenance of personal data protection per local laws
- Type of infrastructure the platform runs on
- Custodians used to store digital assets on the platform
- Presence of multi-layered security architecture
- Security audits undergone and certifications obtained
- Daily name screenings to check databases and individual names against sanctions lists and politically exposed persons (PEPs)
- Monitoring of transactions to identify suspicious or irregular patterns on the blockchain
- Easy point of contact for unforeseen circumstances when accounts are compromised
7. Find out more about cryptocurrency
Cryptocurrency has gained a significant foothold in many individuals’ and financial institutions’ portfolios. New entrants to the market would do well to gather knowledge regarding this relatively new field on the following:
- Fundamentals of cryptocurrency
- Cryptocurrency white papers
- Trading strategies you can adopt regardless of market conditions
- Volatile nature of cryptocurrencies
- Types of digital tokens available in the market
- Key features of blockchain technology
- Different ways to trade cryptocurrency
- Methods to store cryptocurrencies safely
- Technology that DPT (Digital Payment Token) services provide
Navigating uncertainty with confidence
At Sparrow, the need to offer a secure trading experience parallels the aim of meeting the highest compliance and operational standards. Achieve growth objectives with peace of mind through the following :
- BitGo, a world-class custodian, holds digital assets held on behalf securely
- Users must undergo a stringent KYC/AML/CFT screening
- Layered-security architecture with perimeter defense measures
- Regular and rigorous Vulnerability Assessment and Penetration Testing (VAPT) to detect and remediate vulnerabilities
- Cloud native infrastructure to ensure platform performance, scalability, and agility
- Partnered with renowned cybersecurity firms to conduct comprehensive security audits
- Acceptance of instant and fast funds transfer to Sparrow directly through PayNow’s secure facilities
Reach out to find out how Sparrow can help provide a secure, seamless experience as you embark on your cryptocurrency trading journey!
Risk warning on digital payment token services:
The Monetary Authority of Singapore (MAS) requires Sparrow Tech Private Limited (Sparrow) to provide this risk warning to you as a customer of a digital payment token (DPT) service provider.
Before you pay Sparrow any money or DPT, you should be aware of the following.
- Sparrow is exempted by MAS from holding a licence to provide DPT services. Please note that you may not be able to recover all the money or DPTs you paid to Sparrow if Sparrow’s business fails.
- You should not transact in the DPT if you are not familiar with this DPT. Transacting in DPTs may not be suitable for you if you are not familiar with the technology that the DPT services provide.
- You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.
The information provided here is for informational purposes only and is not to be construed as a recommendation or advice to any prospective investor in relation to any legal, tax, financial investment or any other matters. You should consult with an attorney or other professional advisors to determine what may be best for your individual needs.
Content contained on or made available through any of our communication channels is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on any of our communication channels is at your own risk.