New crypto users shouldn’t ‘rush into DeFi’ — Security firms
While the prevalence of hacks within the crypto space might deter new users from jumping in, crypto security professionals say that there are ways for them to avoid the riskier parts of crypto.
On Jan. 22, a market sizing report from Crypto.com showed that the crypto space reached about 580 million users in December 2023, increasing 34% since January 2023.
With crypto onboarding more new users, Cointelegraph spoke with security professionals to get insights on what those new to crypto should do to keep their funds safe in the digital asset space.
Luciano Ciattaglia, the director of services at cybersecurity company Hacken, said that new digital asset users should avoid decentralized finance (DeFi) or decentralized exchanges (DEXs) when starting their crypto journey. Ciattaglia said:
“Don’t rush into DeFi or DEXs straight away. Most people use centralized exchanges or wallets for all their crypto investments, and that’s fine.”
Ciattaglia added that when putting funds into a custodian, users “rely on their trustworthiness.” Because of this, the executive advised new users to choose exchanges that have a good track record in terms of security and funds availability.
CertiK co-founder Ronghui Gu shared similar sentiments. Gu also believes that new users who are interested in investing but are concerned about security should opt to use reputable exchanges and wallets. Gu said:
“Consider investing in a hardware wallet for the highest level of security, as these devices store private keys offline and are highly resistant to network-connected hacking attempts.”
Gu added that users should also educate themselves on the basic principles of crypto security before investing. This includes securing private key storage and using strong passwords. In addition, users should also enable multifactor authentication on all accounts related to their crypto activities.
The security professional also highlighted that new crypto users should be wary about sharing their personal data online and be wary of phishing scams.
On April 3, CertiK released a report highlighting a total of 83 crypto phishing incidents in the first quarter of 2024. Gu said that the sophistication and success of phishing attacks reached “alarming levels” in Q1.
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Apart from these, Ciattaglia also highlighted that new users should make sure the projects they are investing in have security audits. According to the security professional, audited projects with active bug bounties are “less likely to rug pull.”
In its quarterly report, Hacken shared that 56% of hacked projects from January to March 2024 did not go through security audits. This meant that vulnerabilities were unresolved for a larger percentage of those companies.
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