What is 2FA?

2FA (Two-Factor Authentication) adds an extra security layer requiring two different verification methods to access your account. Even if someone steals your password, they can’t log in without the second factor.

Why 2FA Matters for Crypto

Account Protection

  • Cryptocurrency theft is irreversible
  • Exchange accounts are prime targets
  • Password alone is insufficient
  • 2FA blocks most unauthorized access

Common Attack Vectors Blocked

  • Password breaches from other sites
  • Phishing attacks
  • Credential stuffing
  • SIM swap attacks (with proper 2FA)

Types of 2FA

  • Google Authenticator
  • Authy
  • Microsoft Authenticator

How it works:

  • App generates 6-digit codes
  • Codes change every 30 seconds
  • Tied to your device

Pros:

  • Offline, no SMS needed
  • More secure than SMS
  • Free to use

Cons:

  • Lose phone = lose access (backup codes!)
  • Must transfer when changing phones

SMS 2FA (Weaker)

How it works:

  • Exchange sends code via text
  • Enter code to log in

Pros:

  • Simple, familiar
  • No app needed

Cons:

  • Vulnerable to SIM swap attacks
  • Requires cell service
  • Can be intercepted
  • Not recommended for crypto

Hardware Security Keys (Most Secure)

  • YubiKey, Titan Key
  • Physical USB/NFC device
  • Touch to authenticate

Pros:

  • Most secure option
  • Immune to phishing
  • No codes to enter

Cons:

  • Costs money ($25-50+)
  • Need backup key
  • Not supported everywhere

Email 2FA

  • Code sent to email
  • Weakest option
  • Only use if nothing else available

Setting Up 2FA

On Binance

  1. Go to Security settings
  2. Enable Google Authenticator
  3. Scan QR code with app
  4. Enter verification code
  5. Save backup key securely

On Coinbase

  1. Settings → Security
  2. Enable 2-Step Verification
  3. Choose authenticator app
  4. Scan and verify
  5. Save recovery codes

On Kraken

  1. Security settings
  2. Set up 2FA
  3. Supports authenticator and hardware keys
  4. Enable for login AND withdrawals

2FA Best Practices

Setup

  • Use authenticator app, not SMS
  • Enable for login AND withdrawals
  • Save backup codes offline
  • Set up on multiple exchanges

Backup Codes

  • Write down and store securely
  • Don’t keep only on your phone
  • Consider fireproof safe
  • These are your recovery method

Phone Changes

  • Transfer authenticator before wiping old phone
  • Use Authy for cloud backup option
  • Keep backup codes accessible

Common 2FA Mistakes

Not Backing Up

  • Phone breaks = locked out
  • No recovery without backup codes
  • May lose access to funds permanently

Using SMS

  • Vulnerable to SIM swapping
  • Hackers call your carrier
  • Transfer number, intercept codes
  • Has caused major losses

Screenshot of QR/Codes

  • Can be stolen if phone compromised
  • Cloud backup can leak them
  • Write on paper instead

What to Do If Locked Out

Have Backup Codes

  1. Use backup code to log in
  2. Reset 2FA immediately
  3. Generate new backup codes

No Backup Codes

  1. Contact exchange support
  2. Verify identity (slow process)
  3. May need video call, documents
  4. Can take days to weeks

2FA for Different Actions

Login 2FA

  • Required for every login
  • First line of defense
  • Should always be enabled

Withdrawal 2FA

  • Additional check for withdrawals
  • Critical for security
  • Enable separate from login

API 2FA

  • For automated trading
  • Restricts API access
  • Essential if using bots

Hardware Wallet vs Exchange 2FA

Exchange 2FA

  • Protects exchange account
  • Still trust exchange with funds
  • Essential but not complete security

Hardware Wallet

  • You hold the keys
  • 2FA is irrelevant - you have physical device
  • Ultimate security for holdings

Best practice: Use 2FA on exchanges for trading, withdraw to hardware wallet for storage.

Recovery Planning

Create Recovery Plan

  1. Store backup codes in safe location
  2. Have trusted person know location
  3. Document 2FA methods used
  4. Test recovery process