Survey sheds light on crypto users’ poor security practices

Hardware wallet producer Ngrave released the results of a survey on how safely cryptocurrency users store their crypto assets.

Published by Ngrave on Jan. 13, the survey showed that a quarter of the people who took part in the study are less secure than they expected to be, while only 1% are safer than they believed themselves to be.

The study showed that the recent leak of data from competing hardware wallet producer Ledger seemingly severely affected the satisfaction with the security of the crypto space.

Before the incident, only about 15% of the users were unsatisfied and after it took place this percentage rose to 45%. As Modern Consensus reported in late December, the leading hardware wallet’s customers’ personal information was hacked in June, and last month the personal data of its customers was released for free on the internet.

The study also revealed 62% held at least part of their crypto assets on a crypto exchange, meaning that they entrusted a third party to hold their private keys. More worryingly, one-third of the respondents held more than  40% of their assets at one single cryptocurrency exchange.

While losses were down substantially in 2020, according to CipherTrace, crypto fraud, thefts, and hacks still accounted for $1.8 billion through October. That includes September’s $281 million hack of the KuCoin exchange in September.

Fortunately, fully 96% of the respondents used some form of two-factor authentication (2FA) for their exchange accounts. Still, 4% of crypto users not using any 2FA system is a surprisingly high result that makes their crypto exchange accounts easy targets for hackers. Also, one quarter of those who do use 2FA do not back up their 2FA keys.

Almost half of the respondents back up their cryptocurrency exchange login credentials online (27.5%), but more than 17% do not do it at all. Interestingly, 15% of the study participants did not verify their identity at the cryptocurrency trading platforms that they use. Also, 44% of the users who answered the survey’s questions do not whitelist withdrawal addresses on the exchanges they use.

Two-thirds of the respondents already own a cryptocurrency hardware wallet, and of that group, 87% perform test transactions before making large withdrawals. 

The survey was taken by over 1,400 cryptocurrency users from 78 countries around the world, 90% of them male, and more than 60% were 25 to 45 years old.