Crypto

Top Compliance Tips for Safeguarding Your Cryptocurrencies

The adoption of cryptocurrencies and blockchain technology is taking the world by storm. As of today, there are over 560 million owners worldwide. However, as the number of legitimate users has grown, so have illicit transactions and people using the sector for thefts and scams. Crypto crime in 2023 went from $20.6 million in the previous year to $39.6 billion, and it is expected to increase by the end of 2024.

While the opportunities in the blockchain space abound, there is a growing concern about asset safety issues, and traders are advised to take compliance and security measures seriously. To help with that, we’ve compiled a list of the best compliance tips to safeguard your assets. Let’s start briefly explaining crypto compliance and why every investor needs it.

What is Crypto Compliance

Crypto compliance is the process of following anti-money laundering (AML) regulations and all other procedures to prevent and identify illegal Web3 activities. Compliance helps protect your investment and makes it safe to continue all transactions. The AML is the catchphrase for watching over all illicit transactions in the blockchain space, and one of the major ways it achieves this is through customer verification, which includes KYC, KYB, and KYT. KYC is short for Know Your Customer, with KYB and KYT being Know Your Business and Know Your Transactions, respectively.

A crypto trading platform uses KYC processes to verify the identities of individuals and customers, while KYB is due diligence for verifying businesses. The KYT is along the same line as both components but is meant to monitor transaction details. Knowing about crypto compliance is insufficient to stay safe from thefts and hacks. Let’s move on to some tips that can help achieve that.

Best Tricks and Tips for Crypto Compliance

Adhere to KYC and AML Requirements

The KYC and AML checks are there for investors’ safety, but for this to work, traders need to adapt. This starts with using reliable crypto platforms that request these checks at every point. The identity verification will include valid documents, name and identity, proof of address, biometric verification, and images that match. Adhere to these requests and provide accurate personal information. If you change your address, phone number, or other vital details, update this information with the platform. Some may require re-verification of your identity after major changes.

Secure Your Private Keys and Wallet

Private keys hold access to your assets. Some ways to secure them are to keep a strong password and enable two-factor authentication. A strong password should contain about 12 characters, a combination of letters, numbers, and symbols. Avoid common mistakes most people make when creating passwords, such as using the most obvious phrases. If your trading platforms offer 2FA authentication processes, use them for an extra layer of security.

Use Reputable Exchanges and Trading Platforms

Around 500 crypto exchanges are in today’s market, providing many options. When you choose, consider licensed platforms to operate in their jurisdictions. They should also have heightened security features, a sound customer support system, and other offerings like payment methods, accessibility, and user interface. Look for exchanges with a track record of secure operations and quick response to attempted breaches. Be sure they have an insurance fund that can cover losses in case of a security incident.

Use Multi-Factor Authentication

Multi-factor authentication (MFA) acts as an extra layer of security to prevent unauthorized users from accessing your assets. Compared with 2FA, MFA has additional dimensions requiring more than two authentication processes. This process helps safeguard your wallet in cases of unusual login attempts, such as several failed logins, a different device being used, day and time, and the user’s geographical location. Your provider will alert you in any highlighted scenarios to verify its legitimacy.

Constantly Monitor Regulatory Changes

The regulatory climate in the crypto market is on the radar, and most authorities are introducing new ways to gain control. Look out for new regulatory changes, especially from the SEC (Securities and Exchange Commission). If your crypto trading platform gets flagged or is experiencing challenges with these bodies, it could be a queue to withdraw your funds. Regulatory authorities constantly monitor private crypto platforms like Monero and Zcash for their susceptibility to crime. If you’re an investor in one of these, ensure you stay aware of news and updates.

Securing Your Assets Through Proper Compliance

Proper security measures in the blockchain space are essential for minimizing risk and ensuring the long-term safety of your asset. You can start by learning more about compliance components and AML protocols. It’s essential to stay up to date with criminal terminologies and new approaches being taken by people to carry out these illegal transactions. Be aware of your environment and monitor the latest trends.

Author
  • Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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