How can traders improve their scam risk management?

Looking back at crypto history we can know one thing for sure – keeping your funds on the exchange can be painful. You can lose your funds in the case of the exit scam or crypto exchange hacks. Let’s look at some of them:

• MtGox in 2014 740,000BTC
• Bitstamp in 2015 19,000 BTC $5.000 000
• Bitfinex in 2016 120.000 Bitcoin $72.000 000
• BTC-e in 2017  66.000 Bitcoin
• Cryptopia Exchange in 2019 ERC 20 hack
• Quadriga exchange in 2019 

The hacks listed here are just a tip of an iceberg, losing your crypto from the exchange can happen on any exchange – in 2020 $40 million dollars were stolen from the most famous crypto exchange – Binance. 

If you are a trader how do you proceed knowing that your funds can be in danger? 

Of course, you can become a HODLER but it seems out of the question especially if you are profitable in your trading.

The safest way to distribute the risk of losing your money in an exchange hack is to keep your funds in a few of them. The problem is somehow managing them at the same time – here comes SkyRocket. In the one interface you can manage all the accounts (Binance, BitMEX and more coming soon) in the same place.

SkyRocket hack possibility, the case of Binance 

On March 7th 2018 the news spread about a possible hack on Binance. It was connected to a third party app – more specifically trading bot. To use a bot user had to give their API the same way as it is done at SkyRocket Trade. 

The plan of attack was to pump low cap Altcoin called VIA with the user’s funds and withdraw the profit out of the exchange. Fortunately, exchanges are prepared for this kind of scams. The transaction was flagged as irregular and suspicious – automatic risk management was triggered. The funds are SAFU.

The story of Binance shows us that third-party apps are safe as long as you don’t let it have the possibility to withdraw funds. Within the SkyRocket platform, we went one step further – you can’t even let your funds be withdrawn by the app. If you are using other third-party apps on the exchange – never tick the box to enable withdrawals.

Just a quick reminder that the SkyRocket Trade platform is for free – all you have to do is to register here (https://app.skyrocket.trade/register) and create a BitMEX or Binance account from our ref link.