Suppose you want to engage in crypto investing, there are a few key things to keep in mind in terms of custody, security, and insurance. Crypto assets are often highly valuable and if stolen or lost, they can be very difficult to recover. That’s why it’s important to choose a crypto trading platform that offers custody, security, and insurance protection for your investment.
Aspects of crypto trading to keep in mind include; custody, security, and insurance
1. Cryptocurrency Custody
Offering a custodial service platform is one way to ensure the security of your crypto assets. The platform will hold your assets in a secure digital wallet on your behalf. The benefit is that it reduces the risk of you losing your assets if your computer is hacked or damaged.
Cryptocurrency custody solutions are becoming increasingly popular. However, it is important to remember that custodial services come with their own set of risks. For example, if the platform you are using is hacked, your assets could be stolen.
Additionally, there are regulations surrounding cryptocurrency custody that you should be aware of before using any custodial services.
Regulations of custodial services include;
- Financial Action Task Force (FATF)
These are international standards that aim to prevent money laundering and terrorist financing.
- Securities and Exchange Commission (SEC) in the United States
Platforms that offer custodial services to US investors must comply with SEC regulations.
When choosing a platform for crypto trading, it is important to consider the custody solutions that they offer. Research the platform thoroughly to ensure that they are compliant with all relevant regulations.
2. Cryptocurrency Security
Security is another factor to consider when crypto trading. Suppose your account is hacked or your private keys are stolen, it is important to choose a platform that offers robust security features such as a cold storage wallet and make sure that only you have access to it to avoid losing all of your assets.
Some of the most important security features to look for include;
- Two-factor authentication (2FA)
A security feature that requires you to confirm your identity with two different factors. For example, you may need to enter a code that is sent to your mobile phone as well as your password. This makes it difficult for hackers to gain access to your account.
- Multi-signature technology
A security feature that allows you to set up multiple keys for your account. This means that you will need more than one key to access your account.
- Hardware wallets
A type of wallet that stores your private keys on a physical device, such as a USB drive.
3. Cryptocurrency Insurance
In addition to choosing a secure platform, you should also consider taking out insurance for your crypto assets. It will protect you financially if your assets are lost or stolen. There are a few different types of crypto insurance policies available e.g. Storage insurance (a policy that covers the loss or theft of your crypto assets while they get stored on a custodial platform).
Above are the aspects that affect your crypto investment. It’s worth doing some research before making a decision. Take your time and choose carefully so you can find a platform that meets your needs and can ensure that your crypto trading experience is safe, secure, and successful.