Maria’s note: Maria Bonaventura here, managing editor of the Diary. Longtime readers know Bill is skeptical of cryptocurrencies. But these new digital assets remain of interest to Dear Readers. So today, we’re sharing an insight from crypto expert Teeka Tiwari.
Below, Teeka shares some crypto safety tips he learned the hard way. Whether you’re new to cryptos or already familiar with them, you’ll want to read Teeka’s advice closely…
In March 2019, a hacker tried to break into my crypto accounts and steal my funds.
Friends of mine had been hacked before. So I had precautions in place to protect myself. But this was a fairly sophisticated scam.
That’s why today, I’m sharing the steps all token holders should take to protect their crypto accounts and funds from similar attacks…
Now in my case, the hacker impersonated me and called my phone company. They claimed I’d lost my cell phone.
But I have a special code that you must use if you want to make any changes to my phone. And I’ve told my phone company, “Don’t let anybody make any changes unless they have the code.”
Yet it ignored my request. Even though the hacker didn’t have the code, they had my Social Security number. So with the last four digits, they convinced the company to port my number to a new phone.
Once they did that, they used the new phone to reset my email account passwords. And with access to my email accounts, they tried to reset my crypto account passwords to steal my crypto funds.
You see, with $20 worth of a “privacy” coin called Monero and a Tor web browser, you can access the dark web. And you can get just about anybody’s Social Security number.
These numbers aren’t secure. You must assume your number is known – and prevent hacks with the measures I’m about to walk you through…
Step 1: Self-Custody Your Coins
Had I kept my coins on exchanges, this would be a very different story…
Although the hacker was able to get into a few of my crypto exchange accounts, there was nothing there for them to take. Instead of keeping my crypto funds on exchanges, I keep them in offline crypto wallets.
An exchange is where you can buy and sell cryptos. And a wallet is where you should store your cryptos.
Now, there are two types of wallets: digital and hardware. Digital wallets are for online use. Hardware wallets are external devices (many look like flash drives).
Moving your cryptos to a wallet is the first step you should take. If you don’t, the results could be disastrous…
Earlier this year, some wonderful, hardworking folks – including some subscribers of mine – lost millions of dollars by keeping their crypto funds on the now-defunct Canadian exchange QuadrigaCX.
That’s why you should always self-custody your crypto funds when possible (in other words, store them yourself). And that’s the beauty of cryptocurrency: You can control your digital assets. You’re like your own bank.
Let me explain…
Each crypto account comes with a “private key.” Private keys allow you to send and access your crypto holdings. So it’s important you maintain possession of them.
As long as you have custody of your private keys, no one can access your digital assets. Just remember, never store your private keys on the internet.
Don’t store them in your iCloud, Evernote, or Microsoft OneDrive accounts. Those were the first places where my hacker went hunting for my crypto keys.
You can write your passwords and private keys in a physical form and store the documents in a bank, safety deposit box, or safe in your house. And you can keep another digital copy on an encrypted flash drive.
That’s the safest way to protect your funds.
Now, in some cases, you might need to keep your cryptos on an exchange. For instance, there may be a “swap” or a “fork” that requires you to convert or receive new tokens. So you may need to let the exchange handle the conversions for you.
And on other rare occasions, a token may not have a wallet available yet. You’d have to keep the coin on an exchange until one is available. But that doesn’t happen very often.
In these cases, if you must use an exchange, you should keep fewer funds.
We suggest that you put only as much on the exchange that’ll allow you to sleep well at night. If you can’t sleep well, you have too much on the exchange.
And if these situations do arise, make sure you have two-factor authentication for your accounts. Which brings us to the next step…
Step 2: Add an Extra Layer of Security
Most banks and crypto exchanges will want you to provide a phone number to authenticate your account. It’s called two-factor authentication, or 2FA.
For your 2FA to be extra secure, you need a second phone number that isn’t attached to you in any way, shape, or form.
That means your name won’t be linked to that number. Essentially, it’s an anonymous number. So you can link your recovery email to this secondary number for authentication.
This way, if you lose your primary phone – or if it gets hacked like mine did – no one can reset your passwords using your primary number.
It’s a lot of work and inconvenience to set up a second phone number and email address. But it’ll be even more inconvenient if hackers get into your accounts.
I can’t tell you what a hassle it was to change everything: my phone number, all my accounts, emails, and passwords… I even had to freeze all my credit reports.
It’s not super easy, but it’s not rocket science, either. And it’s the best solution I’ve found so far…
In Short: Take Your Crypto Security Seriously
To recap, here’s what you need to do to protect your crypto funds:
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Self-custody your cryptos by storing them in digital or hardware wallets.
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If you must leave funds on exchanges, leave only enough necessary to make transactions.
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Use two-factor authentication (2FA).
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Consider a secondary phone number and email address separate from your name and identity.
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Never store your passwords on the internet.
There’s no Federal Deposit Insurance Corporation (FDIC) in the crypto game, so your funds aren’t insured like the money in your bank account is.
And while there will likely be crypto insurance at some point, we’re on our own right now. So please take that to heart.
Again, the good news is, my funds ended up safe. So I strongly urge you to follow the steps above and keep your funds safe, too.
Let the Game Come to You!
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Teeka Tiwari
Editor, Palm Beach Confidential
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