Security Firms Warn Against Rushing into DeFi for New Crypto Users

Newcomers to the world of cryptocurrency may be hesitant to jump in due to the prevalence of hacks within the crypto space. Crypto security professionals assure that there are ways for them to minimize the risks and keep their funds safe. Recent statistics from Crypto.com revealed that the crypto market gained approximately 580 million users in December 2023, marking a 34% increase compared to January of the same year. With more people entering the crypto space, interviewed security professionals to gain insights into how new users can protect themselves in the digital asset realm.

Luciano Ciattaglia, director of services at cybersecurity company Hacken, advised new digital asset users to avoid decentralized finance (DeFi) or decentralized exchanges (DEXs) when starting their crypto journey. He recommended that most people use centralized exchanges or wallets for their crypto investments, as they rely on the trustworthiness of these custodians. Ciattaglia emphasized the importance of choosing exchanges with a strong track record in security and funds availability.

Similarly, Ronghui Gu, co-founder of CertiK, stressed the significance of using reputable exchanges and wallets for users who prioritize security. Gu suggested investing in a hardware wallet for the highest level of protection since these devices store private keys offline and are highly resistant to network-connected hacking attempts. Prior to investing, users should educate themselves on the basic principles of crypto security, such as securing private key storage and using strong passwords. Enabling multifactor authentication on all accounts related to crypto activities is also crucial.

New crypto users should exercise caution when sharing personal data online and be vigilant about phishing scams. A recent report by CertiK revealed that there were 83 crypto phishing incidents in the first quarter of 2024, indicating an alarming level of sophistication and success in phishing attacks during that period. Ciattaglia emphasized the importance of investing in projects that have undergone security audits. Hacken’s quarterly report disclosed that 56% of hacked projects from January to March 2024 did not go through such audits, leading to unresolved vulnerabilities for a significant portion of these companies.

While the crypto space may pose risks, there are precautions that new users can take to safeguard their funds. By avoiding DeFi and DEXs at the beginning and opting for reputable exchanges and wallets, users can minimize the chances of falling victim to hacks. Educating oneself on crypto security principles, using hardware wallets, enabling multifactor authentication, and being cautious about personal data and phishing scams are additional steps that new users should prioritize. By investing in audited projects with bug bounties, users can further reduce the risk of encountering security vulnerabilities.

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6 thoughts on “Security Firms Warn Against Rushing into DeFi for New Crypto Users

  1. It’s all well and good to talk about protecting your funds, but how can we really trust these centralized exchanges and wallets?

  2. I completely agree with Luciano Ciattaglia that it’s wise to start with centralized exchanges or wallets when entering the crypto space. Trustworthy custodians are definitely important when it comes to security.

  3. I wish there was a foolproof method to keep our crypto assets safe. But it seems like no matter what we do, there’s always a risk. 💔

  4. It’s frustrating that newcomers have to be so cautious and take so many extra steps just to protect their investments. Crypto should be more user-friendly.

  5. It’s disheartening to hear that even audits don’t guarantee the security of crypto projects. It’s like there’s no solid defense against hackers.

  6. I’m skeptical about the future of cryptocurrency if the prevalence of hacks continues to be a problem. It’s not sustainable in the long run. 🤷‍♀️

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