If you’ve ever considered investing in cryptocurrencies like bitcoin or ether, you may be wondering whether it’s safe. While all investments carry risk, crypto assets are particularly vulnerable to theft and loss. In addition, many crypto assets aren’t recognized legally by governments in the same way as cash, stocks and bonds. Therefore, legal remedies for damages and restitution may not be available to victims of losses caused by cybercriminals or other criminals who target cryptocurrencies.
Hackers, scammers and other criminals are increasingly targeting new crypto investors with phishing schemes and other malicious attacks. These attacks are designed to trick you into sending money or transferring private keys to a fake account. Scammers often impersonate well-known companies, and they can use social media to reach out to new potential clients.
You can avoid being scammed by ensuring that your email address and phone number are always up to date with the latest information. If you receive an email that says your account has been hacked or is at risk, don’t respond and call the company back. You should also be suspicious if you’re asked to buy cryptocurrency in order to resolve the issue.
Scammers will often pose as a person or a company you know and ask for your cryptocurrency funds. They will send you a message or phone call that looks genuine and then tell you that your accounts have been compromised, that you need to buy cryptocurrency to fix the problem, or that your computer is infected. If you receive any of these messages or calls, it’s best to ignore them and report them to your local police.
It’s also important to make sure that you only invest in reputable exchanges. A good place to start is to do your research and read reviews of the companies you’re considering before you deposit or withdraw any funds.
One of the biggest reasons why you should never invest in cryptocurrencies is because they are incredibly volatile, which means that their value can change drastically over a short period of time. This can result in a significant loss of investment.
The main reason why you should never store your crypto in an exchange is that these companies can go out of business, causing you to lose all of your funds. The only way to ensure that your crypto funds are protected is to keep them in a secure wallet, which you can do by using a hardware or software crypto wallet.
When you’re storing your crypto, it’s also a good idea to record your recovery phrases (also known as mnemonics or secret keys) somewhere safe so that you can easily access them in the event that your crypto wallet is compromised. These phrases are used to generate the private keys that you’ll need to access your crypto funds, so it’s crucial that they remain safe.
It’s also a good idea to save your recovery phrases in a secure location that only you can access, and to not share them with anyone else. Another good rule of thumb is to never save your recovery phrase or private key on your computer, as this can be easily stolen by hackers.