Security: Top 5 things to know before investing in cryptocurrencies

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   Investing in crypto-currencies is a choice that many individuals and professionals have turned to in recent years, either to diversify their assets or to generate a higher return than what the traditional markets offer.

      That's why it's important to have some basics that will allow you to optimize the security of your cryptocurrency investments.

      In this article we will detail the critical points to watch out for when you decide to invest in the cryptocurrency market.

 

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The choice of platform :

The first step is to choose the platform that offers the best security.

Every year dozens of platforms are hacked and their customers' funds stolen; in most cases these funds are lost.

The total amount of stolen funds is estimated at more than €2,200 million between 2014 and today.

Behind this is a simple explanation: the majority of these platforms are not regulated by any competent authority.

Our first advice is: "Always choose a platform registered with the AMF" (see list here)

Coinhouse is the first platform registered as a PSAN with the AMF (E2020-001). In addition to being the leader on the French market, Coinhouse is a historical actor of the cryptocurrency in France.

Since its inception in 2015 Coinhouse has always prioritised the safety of its clients' assets through the most advanced security technologies on the market (in partnership with Ledger) as well as the rigorous KYC processes in place.

 

Storage of your assets :

When you buy or deposit a cryptocurrency, it is stored on what is commonly known as a "wallet" which is a digital wallet that specialises in storing cryptocurrencies

These digital wallets are made up of a public key that allows cryptos to be received and sent, much like an IBAN, and a private key that corresponds to the secret code that allows access.

 

There are several storage solutions such as free online wallets, but the most secure is the "hardware wallet" which takes the form of a USB key. The undisputed leader in this market is the company Ledger, which offers the most efficient storage system to date.

Coinhouse takes the security of your assets very seriously, we do everything possible to ensure that your assets are secure and easily accessible to you.

So it's fitting that we've adopted their Ledger Vault technology to store your assets, it's a true digital safe that is completely cut off from the internet, more commonly known as a cold wallet. Logging into your Coinhouse account allows you to communicate with this vault.

If you want to secure your assets yourself on a Ledger key or other external wallet, you can send and deposit the following assets to and from our platform at your convenience: Bitcoin, Ethereum, Ripple, Litecoin and BitcoinCash.

If you want to set up a Ledger key you can also follow our tutorial that we have created.

 

Optimise the security of your account :

The biggest security risk is related to your login details. Unfortunately, it is not uncommon for mailbox credentials to be compromised on another platform, which can allow someone to access your Coinhouse account. We encourage you to follow these tips to minimise the risks associated with your login details:

  • Use a unique email address: If you use an email address that will only be used to connect to our platform, the risk of your email address being leaked is greatly reduced. However, if you do not wish to create a new email address, we invite you to check your email address on a site like "haveibeenpwned" which will allow you to see if your personal data has already been leaked into a known data breach.
  • Use a unique password and change it regularly: Using a unique password that is different from your other passwords will minimise the risk associated with it. We also advise you to update it periodically, an 8 character password is considered secure for a few days, 12 characters for 90 days and 15 characters for one year.
  • Enable 2FA via Google Authenticator: The 2FA via Google Authenticator allows you to receive the 6-digit code authorising critical operations on your account via an application rather than by email. Even if your email is leaked, the malicious person would not be able to see this 6-digit code. To set up this feature, you can visit our dedicated FAQ article.

 

The choice of cryptocurrency :

Today, there are more than 11,000 cryptocurrencies on the market. This complicates the investment decision, especially as the majority of these crypto-currencies are bound to disappear in favour of more solid projects.

According to statistics, as many as 2,500 crypto-currencies are declared dead (abandoned or fraudulent) which is almost 1 in 4 crypto-currencies (other analysts agree that the number is much higher and amounts to 1/3)

-"But what happens if tomorrow a cryptocurrency disappears?"

-The answer is simple: your investment will also disappear!

That's why at Coinhouse we take this very seriously and only offer the most promising projects on the market with solid fundamentals.

The crypto-currencies are listed only after rigorous research by our analysts and all have strong fundamentals offering good potential long-term returns. (See list of proposed crypto-currencies).

 

Still not sure how to build your portfolio?

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Beware of false promises :

As with any other investment, one should always beware of frauds and scams. Although cryptocurrencies are digital assets, the scams surrounding them are real and can cause financial losses amounting to tens of thousands of euros. Here are a few things that make it easy to spot these scams:

  • Cold call: If you receive a cold call or even several cold calls inviting you to invest in crypto, it should raise a red flag. Chances are, your phone number has been broadcast on a database accessible by a variety of scammers.
  • Investing through a platform other than their own: If the person you are talking to invites you to invest on their platform by sending them Bitcoin from a platform they do not own, cut off contact with them immediately. There is a very good chance that they are trying to steal your funds.
  • Using MetaTrader5: Many scammers will offer you a Metatrader5 based interface that allows them to manipulate the values visible on your "portfolio", making you believe that you have made a phenomenal gain.
  • Promises of high returns: Most scammers will offer you returns ranging from hundreds to thousands of percent. This is obviously unrealistic and misleading, the cryptocurrency world remains volatile and no serious player will offer you guaranteed returns.
  • Installing an application to control your device: An AMF-registered and well-supervised actor will never ask you to install an application to manipulate your device. Indeed, these applications pose a real compliance risk and their use to make investments goes against the RGPD guidelines.

However, unscrupulous scammers invite you to install applications such as Anydesk or Teamviewer which give them full access to your device. They could very easily transfer money from your bank account to theirs or get you to create an account and go through the identity verification process.

  • To release your funds, you are asked to send cryptos or fiat currency to pay a fee: If you have already sent them funds to the scammers, it is too late to recover them. To minimise losses, cut off all contact with them and report them to the relevant authorities. Unfortunately, once the funds have been received by them, you will probably never see them again and they will stop responding to you.

Stay alert!

If you have any further questions, we are at your disposal !

Monday to Friday : from 9:30 to 18:00.

 

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