Crypto is a great industry to launch a business for aspiring entrepreneurs looking to make it big sooner than later. The market offers incredible growth opportunities even with a small investment. Not surprisingly, more and more investors are making a beeline for it. And many are actually approaching it with a business mindset instead of only an investment.
But did you know that fraudsters are constantly chasing investors and startups in the crypto world? The numbers say it all. Reports validate that around $4 billion worth of cryptocurrencies were stolen in 2021 alone. That’s whopping, right? And scary as well!
If you’re running a crypto startup, you’ve got to be on your toes to prevent scammers and fraudsters from taking a slice of your pie. Well, the good thing is that it’s easier than you imagine, provided you are vigilant enough. And we’ve got your back with some actionable fraud prevention strategies to protect your crypto startup.
So, let’s dive in, and help you run your startup without stressing over safety!
Table of Contents
Invest in security best practices
Well, this one’s a given when you’re dealing with online currency. You cannot overlook the risks of cyber theft and hacking attacks. Crypto investment is all about security because hackers are always ready to strike. So you must embrace security best practices to keep them at bay.
Use two-factor authentication (2FA), stick with robust passwords, and secure servers to safeguard your funds and personal information. Training your employees is another way to secure your business. Also, conduct regular security audits because a set-and-forget approach is a bad choice.
Don’t skimp on cybersecurity, or you may end up losing your private keys and a ton of money. If you run a business, you may also lose your reputation.
Keep your eye on the threats
Besides following the security essentials, you’ve got to keep your eye on the threat. From scams to phishing attacks and fraudulent activity, there are a lot of ways things can go wrong in the crypto investment space.
And it’s easy to be caught unaware because attacks may come from the most unexpected places. Imagine losing your assets only because your wallet wasn’t secure enough or you failed to change your passwords after a while.
The best way to keep these threats at bay is to be watchful. Use only the most trusted platforms and exchanges, and avoid the fishy ones. If something seems too good to be true, steer clear of it.
Know your rights
Like any entrepreneur, you’ve got to know more than business strategies when it comes to running your venture. Being aware of your legal rights can help you keep your business safe.
Well, crypto fraud and recovery are both a reality because you can hire a crypto lawyer to help with compensation if something goes amiss. For example, investors can claim dues from Coinbase as the exchange failed to comply with the regulations, leading to losses.
You only need to look for a legal professional with relevant experience to establish a valid claim and get the compensation you deserve. Giving up on your rights can kill your business, so stay updated and informed.
Be cool, and don’t panic
Crypto fraud is more common than you imagine, and your startup may face it at some point, no matter how vigilant you are. But remember not to panic if you do encounter fraud because it will only worsen the situation.
A proactive approach can save you from more trouble. Why not seek an expert opinion if you don’t know how to deal with a scam? Take immediate action to protect your assets when things go awry.
Freezing accounts, working with security experts, and contacting law enforcement to investigate the situation are some measures to deal with the situation. The sooner you implement them, the better!
Keep it real
If you manage crypto for clients, be honest and transparent with them. After all, it’s the best way to gain trust and enhance the reputation of your business. Let clients know about your fraud prevention strategies.
Also, inform them about the measures to keep their funds and personal information safe. Information security matters the most to consumers today, and staying a step ahead with privacy measures boosts your reputation. It also keeps your business on the right side of compliance regulations.
Be open to suggestions and feedback, as you may get some valuable tips to improve your security practices. There’s always room for improvement because hackers are smarter than you imagine.
Get insurance coverage
Remember that you cannot skip cyber threats altogether when running a crypto business. An attacker may find a way to get into your system despite the best precautions and security practices. Imagine how badly an incident can hit your startup in the early stage. Sounds daunting, right?
How do you undo the damage if something goes wrong? Insurance coverage is your best bet as it can protect your startup from financial loss resulting from an unexpected security breach. You can buy cyber insurance to cover losses from hacking attempts, data theft, and other security incidents.
A policy may seem like an extra burden to a young startup, but it is worthwhile. It can help you survive in the most critical phase, so make sure you don’t cut corners here. Of course, you can shop around for an affordable option that does not burn a hole into your tight budget.
The Takeaway
A crypto investment business is a great opportunity for tech-savvy entrepreneurs, but one needs to look at the other side of the picture before diving in. Well, safety is the most daunting challenge you may face. You’ve got to protect your crypto assets from hackers and attackers, whether you are only an investor or a business owner. In fact, you need to go the extra mile with security if you hold and manage them for clients. Fortunately, you can do it without a lot of hard work. Follow these tips to keep your crypto and reputation safe from attacks. Stay safe, boss!
I am a passionate, adventurous, and insatiate learner who loves to write about the latest technology trends. My experience working in an MNC has motivated me to understand that there are certain niche requirements for writing strategically about brands’ messages towards people’s interests which I’ve mastered over time through trial and error of many projects under various clients across diverse industries. It is my honest effort to put my experiences and knowledge of industry towards readers.
