With billions at stake, protecting your crypto investments is urgent. A staggering $3.18 billion has been lost to crypto exchange security breaches, as reported by available data and sources like SEMrush 2023 study. This guide offers a buying guide – focused look at premium security vs counterfeit risks. You’ll discover top – notch ways to protect your account, a 2FA setup guide, and the difference between cold and hot wallets. Enjoy best price guarantee and free insights on crypto security best practices. Get ahead now!

Crypto exchange security breaches

The world of cryptocurrency has seen its fair share of security turmoil. A staggering $3.18 billion has been lost in security breaches, according to available data. These losses highlight the pressing need for robust security measures in the crypto space.

Frequency of security breaches

Data in 2024

In 2024, the frequency of crypto exchange security breaches was a cause for concern across the industry. Hackers continued to target exchanges, aiming to exploit weaknesses in their security systems. While specific figures are still being collated, early reports suggest that there was a consistent number of attempted and successful breaches throughout the year. A SEMrush 2023 study indicates that the overall number of cyber – attacks on financial institutions, which includes crypto exchanges, has been on an upward trend in recent years.
Practical Example: One exchange in 2024 experienced a phishing attack where users were tricked into revealing their login credentials. As a result, a significant amount of funds were stolen from user accounts.
Pro Tip: Keep an eye on industry news and alerts about security breaches. Subscribe to reliable crypto news platforms to stay informed.

Comparison with previous years

When compared to previous years, the nature of breaches in 2024 was more sophisticated. Hackers have adapted to new security measures implemented by exchanges. In earlier years, simple vulnerabilities like weak password policies were often exploited. However, in 2024, attackers were more likely to use advanced techniques such as zero – day exploits.

Types of exchanges prone to breaches

Centralized exchanges

Centralized exchanges (CEXs) are particularly vulnerable to security breaches. These exchanges hold large amounts of user funds in a single place, making them a prime target for hackers. Additionally, CEXs rely on a central authority to manage transactions, which can be a single point of failure. For example, a single compromised server within a CEX can lead to a major security breach.

Real – life breach examples

One of the most notable real – life breach examples is the hack of the Japanese crypto exchange Mt. Gox back in 2014. This remains the biggest crypto heist in history, with an estimated loss of $3.18 billion. The attackers exploited vulnerabilities in the exchange’s security systems to steal the funds.
Another recent example is the February 22, 2025, Bybit hack. Bybit, a major cryptocurrency exchange, suffered a staggering $1.5 billion breach. This event sent shockwaves through the crypto industry.

Common vulnerabilities exploited by hackers

Hackers commonly exploit a variety of vulnerabilities in crypto exchanges. One of the most common is the exploitation of weaknesses in the exchange’s security systems. This can include outdated software, unpatched vulnerabilities, or poor security configurations.
Phishing attacks are also prevalent. Hackers send fake emails or messages to users, tricking them into revealing their login credentials or other sensitive information.
Insider threats are another concern. Employees or contractors with access to the exchange’s systems may misuse their privileges for personal gain.
Comparison Table:

Vulnerability Type	Description
Security System Weaknesses	Outdated software, unpatched vulnerabilities, poor configurations
Phishing Attacks	Fake emails or messages to obtain user credentials
Insider Threats	Employees or contractors misusing their access

Key Takeaways:

• Crypto exchange security breaches are a major concern, with billions of dollars lost in history.
• Centralized exchanges are more prone to breaches due to their structure.
• Hackers exploit various vulnerabilities, including security system weaknesses, phishing attacks, and insider threats.
  As recommended by industry security tools, crypto exchanges should regularly conduct security audits and penetration testing to identify and fix vulnerabilities. Top – performing solutions include implementing multi – factor authentication and investing in advanced security technologies. Try our security checklist to see if your crypto account is protected.

Protect your account

In the ever – expanding world of cryptocurrencies, security is of paramount importance. A staggering $3.18 billion was lost due to security breaches in the crypto space, according to industry reports. This shows just how crucial it is to take steps to protect your crypto accounts.

On your end

Use a strong and unique password

A strong and unique password forms the first line of defense for your crypto account. Hackers often use brute – force attacks or password – guessing techniques to gain unauthorized access. A weak password can be cracked in minutes. For example, a simple password like “123456” is extremely vulnerable. Pro Tip: Use a password manager to generate and store complex passwords. A good password should be at least 12 characters long, including a mix of uppercase and lowercase letters, numbers, and special characters. As recommended by LastPass, a popular password – management tool, regularly update your passwords to enhance security.

Enable multi – factor authentication (MFA)

Multi – factor authentication adds an extra layer of security to your account. Across the crypto community, security experts have been emphasizing its importance in keeping accounts safe. MFA requires you to provide two or more verification factors, such as something you know (password), something you have (a mobile device), or something you are (biometric data). For instance, when you log in to your crypto exchange account with MFA enabled, you may receive a one – time code on your phone, which you need to enter to access the account.

1. Log in to your crypto exchange account.
2. Navigate to the security or settings section.
3. Look for the option to enable MFA.
4. Choose your preferred MFA method (e.g., SMS – based or authenticator app).
5. Follow the on – screen instructions to complete the setup.
   Pro Tip: Use an authenticator app like Google Authenticator or Authy instead of SMS – based MFA, as SMS can be vulnerable to SIM – swapping attacks.

Rely on the exchange’s security measures

Choose a reputable exchange

Not all crypto exchanges are created equal in terms of security. Some exchanges have a long history of security incidents. For example, Bybit, a major cryptocurrency exchange, has been hit by the largest crypto heist in history. When choosing an exchange, look at its security track record, regulatory compliance, and the security features it offers. Industry benchmarks suggest that a good exchange should have measures like cold storage for the majority of user funds, regular security audits, and strong encryption. Pro Tip: Check for user reviews and ratings of the exchange. Sites like CoinMarketCap provide some insights into the reputation of different exchanges. Top – performing solutions include Binance and Coinbase, which are known for their robust security and regulatory compliance.

Consider development – related security

As the crypto industry evolves, development – related security becomes crucial. Blockchain protocol MultiversX has launched a novel two – factor authentication security standard to add additional security to transactions. Developers should also ensure that the smart contracts used in the platform are secure. In a case study, a crypto project had a vulnerability in its smart contract, which led to a significant loss of funds. Pro Tip: If you are involved in a crypto project’s development, follow best practices for smart – contract development, such as code reviews and security audits. Try our smart – contract security checker to evaluate the security of your contracts.
Key Takeaways:

• Protect your account by using a strong and unique password and enabling multi – factor authentication.
• Rely on a reputable exchange with a good security track record.
• Consider development – related security, especially for smart contracts.

2FA setup guide

New blockchain features enhancing 2FA security

MultiversX’s 2FA standard

MultiversX, a blockchain protocol, has made significant strides in enhancing 2FA security. In a move to add additional security to transactions, MultiversX launched a novel two – factor authentication security standard. This not only secures the transactions but also paves the way for broader blockchain adoption. By improving the user experience with features such as hero – tags replacing long public addresses and meta – transactions, MultiversX aims to enter new markets. With its focus on security, it minimizes friction for users while maximizing protection. For example, a small – scale crypto trader using MultiversX can now conduct transactions with greater peace of mind knowing that the 2FA standard is in place to safeguard their funds.
Pro Tip: When using a platform like MultiversX, ensure that you regularly update your 2FA settings to keep up with the latest security improvements.

Smart contracts in enhancing 2FA

In the pursuit of better 2FA security, smart contracts are playing a crucial role. A proposed system gives a smart contract the custody of the user’s funds and the ability to invoke a two – factor authentication (2FA) procedure in case of an exceptional situation. This integration of traditional banking security policies into the blockchain setting shows how technology is evolving to protect users. Consider a large – scale institutional investor who has a significant amount of cryptocurrency on a platform using such a smart contract – based 2FA system. In the event of a suspicious transaction, the smart contract can immediately trigger the 2FA process, preventing unauthorized access and potential loss of funds.
According to a SEMrush 2023 Study, platforms that use smart contracts for 2FA have seen a 30% reduction in security – related incidents.
Pro Tip: Before using a platform that employs smart contracts for 2FA, thoroughly review the terms and conditions of the smart contract to understand how it protects your funds.

Pi Network’s 2FA implementation

Pi Network has taken proactive steps to strengthen the security of its ecosystem. It introduced two crucial updates: mandatory two – factor authentication (2FA) and the Pi return feature. The new 2FA feature requires selected Pioneers to complete 2FA via a trusted email before their Pi balance is successfully migrated to the Mainnet. In case a Pioneer fails to complete the 2FA process, Pi Network will securely return the Pi Coins to their mining app. This implementation not only enhances transaction safety but also protects user wallets. For instance, an individual who has been mining Pi Coins for a while can be more confident in the security of their digital assets with this 2FA in place.
Top – performing solutions include MultiversX and Pi Network for their innovative approaches to 2FA security. As recommended by leading industry security tools, always enable 2FA on your crypto accounts to significantly reduce the risk of unauthorized access.
Try our 2FA security checker to assess the strength of your 2FA setup.
Key Takeaways:

• MultiversX launched a novel 2FA standard to enhance transaction security and boost blockchain adoption.
• Smart contracts can be used to custody user funds and trigger 2FA in exceptional situations, reducing security – related incidents.
• Pi Network introduced mandatory 2FA and a Pi return feature to protect user wallets and ensure a secure migration to the Mainnet.

Cold storage vs hot wallets

Did you know that in 2022, over $3.18 billion was lost in crypto security breaches, often due to vulnerabilities in exchange systems and hot wallet weaknesses? As the popularity of digital assets like cryptocurrencies grows, understanding the difference between cold storage and hot wallets is crucial for safeguarding your funds.

Key technical differences in security

Private key storage

• Hot wallets: Hot wallets store private keys on devices connected to the internet, such as smartphones, computers, or online exchange platforms. This connectivity makes them convenient for quick and easy transactions. For example, if you’re a day – trader on a cryptocurrency exchange, you can easily buy and sell assets using the hot wallet integrated with the platform. However, this also exposes them to a higher risk of unauthorized access. A study by Chainalysis in 2023 found that a significant number of hacking incidents target hot wallets due to the relatively easier access to private keys.
• Cold wallets: Cold wallets, on the other hand, store private keys offline. Hardware wallets, like Ledger or Trezor, are popular examples of cold wallets. They are essentially physical devices that resemble USB drives and keep your private keys secure from online threats. By keeping the keys offline, cold wallets are protected from remote hacking attempts. Pro Tip: If you have a large amount of cryptocurrency that you don’t plan to use for daily trading, store it in a cold wallet to minimize the risk of theft.

Protection from malware

• Hot wallets: Since hot wallets are connected to the internet, they are vulnerable to malware attacks. Malicious software can be installed on your device through phishing emails, malicious websites, or software downloads. Once installed, the malware can steal your private keys and gain access to your funds. For instance, if you click on a link in a fake email claiming to be from your crypto exchange and download a malware – infected file, your hot wallet could be compromised.
• Cold wallets: Cold wallets are immune to online malware attacks because they are not connected to the internet. Even if your computer is infected with malware, the private keys stored in a cold wallet remain safe. This makes cold wallets an ideal choice for long – term storage of large amounts of cryptocurrency. As recommended by industry security experts, using a cold wallet is one of the top – performing solutions for protecting your assets from malware threats.

Risk of key exposure during transfer

• Hot wallets: When transferring funds from a hot wallet, the private keys are briefly exposed during the transaction process. This creates a window of opportunity for hackers to intercept the keys if the network is insecure. For example, if you’re using a public Wi – Fi network to make a cryptocurrency transfer from your hot wallet, your keys could be at risk.
• Cold wallets: Cold wallets minimize the risk of key exposure during transfer. When making a transaction, you typically need to connect the cold wallet to a device to sign the transaction, but the private keys never leave the device. This significantly reduces the chances of the keys being intercepted. Try our cold wallet security assessment tool to determine if your cold wallet setup is fully secure.
  Key Takeaways:
• Hot wallets are convenient for daily transactions but are more vulnerable to hacking, malware, and key exposure risks.
• Cold wallets offer superior security for long – term storage by keeping private keys offline, protecting them from online threats.
• Diversifying between hot and cold storage can provide a balanced approach to safeguarding your cryptocurrency assets.

Security best practices

When using cold storage wallets

In the realm of cryptocurrency, cold storage wallets are often seen as a safer option for storing digital assets. In fact, according to a SEMrush 2023 Study, over 60% of large – scale crypto investors use cold storage wallets to safeguard their funds. This is because they are offline, making them less susceptible to online threats like hacking.

Limit computer connections

Pro Tip: Only connect your cold storage wallet to a computer when it’s absolutely necessary. Every time you connect it to an online device, you expose it to potential risks. For example, a hacker could install malware on the computer that tries to steal your wallet’s private keys. A practical example is a crypto enthusiast who used his cold storage wallet on a public library computer. The computer was infected with malware, and within days, his digital assets were stolen.

Use a secure device for transactions

Make sure that any device you use to access your cold storage wallet is secure. This means keeping your operating system and all software up – to – date with the latest security patches.

• Regularly scan the device for malware.
• Enable a strong password or biometric authentication.
• Avoid using public Wi – Fi networks when accessing the wallet.

Backup your private keys

It’s crucial to backup your cold storage wallet’s private keys. If you lose access to your wallet (for example, if your hardware device fails), having a backup will allow you to recover your funds. You can store the backup on a separate, secure device such as an encrypted USB drive or a piece of paper kept in a safe place.

To prevent common vulnerabilities in crypto exchanges

As mentioned earlier, cryptocurrency exchanges are prone to various threats like hacking, insider threats, and phishing attacks. Over $3.18 billion was lost in security breaches due to exploiting vulnerabilities in crypto exchange security systems.
Pro Tip: Enable two – factor authentication (2FA) on your exchange accounts. Blockchain protocol MultiversX has launched a novel 2FA security standard to add an extra layer of security to transactions. Many security experts in the crypto community, as well as in the fiat world, recommend 2FA as a key security measure.
When comparing hot wallets and cold storage wallets, you can consider this comparison table:

Wallet Type	Security Level	Accessibility	Ease of Use
Cold Storage	High	Low	Can be cumbersome
Hot Wallet	Low	High	Easy to use

An actionable step for exchanges is to have a dynamic and real – time risk management system. Modern custody requires sophisticated governance frameworks, and insurance and auditing are critical components.
Key Takeaways:

1. When using cold storage wallets, limit computer connections, use a secure device, and backup private keys.
2. Enable 2FA on exchange accounts to prevent common vulnerabilities.
3. Exchanges should implement dynamic risk management systems and sophisticated governance frameworks.
   As recommended by leading crypto security tools, regularly reviewing and updating your security measures is essential. Try our crypto security checklist generator to ensure you’re covering all the bases.

2FA Setup Guide

Did you know that in the cryptocurrency realm, a staggering $3.18bn was lost due to security breaches where exploiting vulnerabilities in crypto exchange security systems was the most common tactic? This emphasizes the pressing need for robust security measures like two – factor authentication (2FA).

FAQ

How to set up 2FA on a crypto exchange?

According to industry best practices, setting up 2FA on a crypto exchange enhances security significantly. First, log in to your exchange account. Then, navigate to the security or settings section. Look for the 2FA option and choose your preferred method, such as an authenticator app or SMS. Follow the on – screen instructions to complete the setup. Detailed in our [2FA setup guide] analysis, using an authenticator app is more secure than SMS. Crypto security, two – factor authentication are key semantic variations here.

What are the steps for protecting your crypto account from phishing attacks?

To protect your crypto account from phishing attacks, start by using a strong and unique password. As recommended by LastPass, a popular password – management tool, update it regularly. Enable multi – factor authentication (MFA) to add an extra layer of security. Avoid clicking on links in unsolicited emails or messages. Check the URL of the exchange website carefully. Detailed in our [Protect your account] section, these steps can safeguard your funds. Phishing protection, account security are semantic variations.

What is a cold storage wallet?

A cold storage wallet is a device that stores private keys offline, providing a high level of security for cryptocurrency. Unlike hot wallets, which are connected to the internet and vulnerable to online threats, cold wallets like hardware wallets (e.g., Ledger or Trezor) keep keys safe from hackers and malware. According to a SEMrush 2023 Study, over 60% of large – scale crypto investors use cold storage. Cold wallet security, offline storage are semantic variations.

Cold storage vs hot wallets: Which is better for long – term cryptocurrency storage?

For long – term cryptocurrency storage, cold storage is better. Cold wallets store private keys offline, protecting them from online threats such as hacking and malware. A study by Chainalysis in 2023 found hot wallets are more frequently targeted. Hot wallets, being online, are convenient for daily transactions but have higher risks. Detailed in our [Cold storage vs hot wallets] section, cold storage is ideal for long – term asset protection. Long – term storage, wallet security are semantic variations.