Tips for New Crypto Users: How to Safeguard Your Funds in the Digital Asset Space

The crypto space has seen a significant increase in users, with a market sizing report from revealing that there were about 580 million users in December 2023, marking a 34% increase from January of the same year. As more individuals are onboarded into the world of cryptocurrency, security professionals are emphasizing the importance of taking precautions to safeguard their funds.

Luciano Ciattaglia, the director of services at cybersecurity company Hacken, advises new digital asset users to steer clear of decentralized finance (DeFi) or decentralized exchanges (DEXs) when starting their crypto journey. Instead, he suggests using centralized exchanges or wallets for investments, as they are more secure for beginners. Ciattaglia also stresses the importance of choosing exchanges with a good track record in terms of security and funds availability.

Ronghui Gu, co-founder of CertiK, echoes Ciattaglia’s sentiments, recommending that new users opt for reputable exchanges and wallets to ensure the safety of their investments. Gu also suggests investing in a hardware wallet for the highest level of security, as these devices store private keys offline and are resistant to network-connected hacking attempts. Additionally, Gu emphasizes the importance of educating oneself on basic crypto security principles, such as securing private key storage, using strong passwords, and enabling multifactor authentication on all crypto-related accounts.

Both Ciattaglia and Gu warn new users to be cautious about sharing personal data online and to be vigilant against phishing scams, as highlighted in a report by CertiK which revealed a total of 83 crypto phishing incidents in the first quarter of 2024. The sophistication and success of these phishing attacks have reached alarming levels, underscoring the need for heightened awareness and caution among crypto users.

Furthermore, Ciattaglia emphasizes the importance of investing in projects that have undergone security audits, as audited projects with active bug bounties are less likely to fall victim to rug pulls. Hacken’s quarterly report revealed that 56% of hacked projects from January to March 2024 had not undergone security audits, leaving vulnerabilities unresolved for a significant portion of these companies.

In conclusion, as the crypto space continues to attract new users, it is crucial for individuals to prioritize security measures to protect their investments. By following the advice of security professionals and staying informed about potential risks, new users can navigate the world of cryptocurrency with greater confidence and peace of mind.