How to assess platform security
It is best to be wary of widespread fraud and deception when it comes to investing with a cryptocurrency exchange, an online platform where users buy, sell and trade cryptocurrencies.
Educate yourself on the stock exchanges, as reputation is the most valuable resource, watch out for the level of security, fees and pairs.
With a combined monthly trading volume of the largest crypto exchanges exceeding hundreds of billions of US dollars, exchanges are becoming a target for cybercriminals, according to Kaspersky.
Hackers are interested in the exchanges since they are centralized systems with a single fault point, the antivirus software company added.
The biggest theft of crypto exchange took place in 2018, where hackers managed to break into Coincheck and steal crypto worth 534 million dollars. The exchange offers a wide range of cryptocurrencies from BTC, ETH, including Sandkassen’s SAND token.
ETH to US Dollars
What is the security risk of crypto exchanges?
A common form of hacking is to infiltrate private keys into the exchange’s hot (online) wallet, therefore hot wallets can be compromised while you transfer funds to withdrawals.
In the meantime, it is difficult to verify whether cold (offline) wallet solutions are 100% offline as there is a lack of visibility of internal security processes and compliance with strict administration protocols.
Crypto Exchange’s browser, desktop or mobile application presents itself as another form of risk when the user accesses it, since they have some sort of vulnerable points.
Hackers will attack the link between the exchange and the user by using malicious software, phishing, keyloggers, DDoS attacks and more.
Hackers use imitation
Social engineering is a way to obtain sensitive data by pretending to be a reliable data source.
This is done when the attacker sends a file infected with malicious software to the crypto exchange worker with relevant information and the name of a person he previously communicated with.
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Once the file is opened, the worker’s device will be affected by malicious software.
A social engineering campaign was launched against Coinbase in the first half of 2021 in an attempt to steal from around 6,000 accounts. Coinbase offers cryptocurrencies such as ADA, SOL and DOGE.
DOGE to US dollars
Green flags for crypto exchange platforms
A general online measure such as two-factor authentication where you have to verify your identity using a method other than just your username and password.
Some exchanges have insurance policies to protect digital currency users from hacking or fraud.
For example, Coinbase, which has an insurance policy, protects its account holders if the reserves of up to $ 255 million were hacked and taken.
A cryptocurrency exchange will also be more appealing if it has an anti-fraud department, as it shows users and shareholders that the exchange is serious about fighting scammers and thieves, which deters such actions. Of course, education is the most powerful weapon to equip yourself.
