It’s a well-known fact that keeping your funds on a cryptocurrency exchange isn’t the safest option.
However, it provides liquidity of funds and that’s exactly what you need whilst trading!
In this article, we will describe what you must do to protect your cryptos while keeping them at exchanges.
Keep in mind though that not all of these mechanisms are available on every exchange. Without further ado let’s get started:
Warning: Never use small exchanges which doesn’t have good reputation. If you can’t find coin you want to buy on: Binance, kraken, bittrex, coinbase, or bitfinex, don’t buy it.
1. Logging in
When you are logging into your account always double check URL which you are visiting! Be aware of phishing sites that may steal your logging data, you should check if the website address is correct.
As you can see there are two small dots under the letter n! Sometimes changes are so small that are hard to notice so make sure to carefully check if the website address is correct!
Another thing to avoid is accessing your exchange accounts from public WiFi spots without strong encryption like WPA-2 protocol.
For extra safety, we recommend creating an email address which you will use ONLY for creating accounts on SAFE exchanges and never ever share it with anyone.
When you are creating this address don’t use your name or anything predictable use and email address like this: [email protected]
and choose a strong minimum 16 character password. We recommend generating a strong password using Secure Password Generator.
Although if you are going to use your regular email address, you should enable 2FA when logging in (especially for Google accounts).
2. Always Enable 2 Factor Authentication
The most common way to add extra security to your account is enabling Two Factor Authentication (2FA) where you simply receive a 6 digit code for a certain purpose.
Depending on the exchange you’re using the options may vary from email, SMS or other app generating unique codes that are being used during certain activities.
It’s up to you which one you will choose, but we highly recommend using Google Authenticator mobile app or Authy.
These two generate disposable code every 30 seconds.
If you decide to enable Google Authenticator code on your exchange account, you will receive a unique QR code (or a line with random digits and letters to enter manually) that you need to scan with your smartphone app or a browser extension like “Authenticator” for Chrome.
Important note: make sure you made a backup of this code (preferably handwritten and stored to a safe place at home).
Please NEVER screenshot it or store it on your phone or computer!
You will need this code in case your app gets hacked or you lose your phone, you will still be able to recover 2FA on your own without contacting support!
The most common 2FA use cases: logging in, withdrawals, changing the password.
3. Always log-out when you’re done
We advise you that during a single login session you will be automatically logged out when you won’t perform any actions after a certain period of time.
If you have that option available make sure to turn it on.
On most exchanges you will have access to all of your activity, which includes login attempts/withdrawals history on your account — you can review this section occasionally to make sure nothing suspicious has ever happened.
The level of security you choose depends on your own comfort with the money you keep on exchange wallets.
Just think if you really want to go through few different authentication processes while logging into your account with $5 worth of coins and you’d do it at least twice a day?
That would be too much of a hassle for me. On the other hand, it will be foolish to login only using password on the account worth $10 000, isn’t it?
Which cryptocurrency exchange should I choose?
The one that has the most secure options and stores your money in cold wallets (offline wallets).
A good reputation is also a thing to look up to.
We recommend Binance for buying altcoins, Bitmex for leverage trading and Kraken for any crypto—fiat or fiat—crypto combinations.
You should also keep as much money on trading sites as you can afford to lose, a good idea will be to spread your funds on at least two different exchanges.
If you have some significant amount of cryptos that are valuable to you (and don’t want to lose it), then send them to your private software/hardware wallet (with access to your private key) in order to make sure you’re safe.
Even then you have to be aware of all kinds of traps where your money can be stolen or lost depending on the type of wallet you have chosen, but that’s a whole different topic to talk about.
Stay safe and you can always contact us if you need any help or advice.
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Sven is a nature lover, philanthropist, and entrepreneur born and raised among the beauties of Balkan. He’s interested in how blockchain has the potential to radically change the world we live in and the transformative power of crypto. He founded CryptoAims in 2019 to provide free cryptocurrency education to everyone.