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Telegram Trading Bots May be Stealing Your Funds! TTBs Security Guide

Daniel Urbánek
Daniel Urbánek
September 08, 2023
News, Security

Become aware of the potential risks of Telegram Trading Bots (TTBs) and learn how to safeguard your digital assets. Identify red flags and make informed decisions.

Telegram Trading Bots (TTBs) have emerged as a popular tool for executing trades quickly and efficiently. However, with the rise of these bots, there are increasing concerns about their security and the potential risks involved in using them. This article aims to shed light on how TTBs work, the security concerns associated with them, red flags to look out for, and basic precautions to take when using them. Understanding the risks and taking necessary precautions can help you make informed decisions and protect your digital assets.

TL;DR:

  • Telegram Trading Bots (TTBs) allow you to execute on-chain transactions directly from the interface of your Telegram chat app.
  • Being such a new trend, the security of TTBs has not been properly assessed. Many of them contain malicious code or are straight-up scams.
  • One of the main pain points with TTBs is that they require access to your private keys. This could easily result in a loss when used with your personal wallet.
  • To avoid getting scammed: always use a fresh wallet, conduct CoinBrain security check, transfer profits away, and enable 2FA on Telegram.

How do Telegram Trading Bots (TTBs) Work?

Telegram Trading Bots are programs that operate within the Telegram messaging application and allow users to execute trades on decentralized exchanges (DEXs) by submitting simple chat commands or via custom buttons. These bots connect to your crypto wallet, perform trades on your behalf, and may offer features like real-time token alerts, sniping capabilities, and multiple wallet management.

Their capabilities are of course quite tempting, which is why many users get overrun by greed and forget to take basic security measures.

Telegram Trading Bots Security Concerns

In order to execute trades for you, TTBs need full access to your wallet, which means that you have to provide your private keys to this software. Some bots do not operate with your existing wallets but instead, generate a new one without you having access to its private keys.

Related: Crypto Security for Dummies: A Complete Guide for 2023 and 2024

Providing your private keys or operating your account without them is at a similar risk level to having your funds held by a centralized exchange. Here are some additional risks that stem from the uneducated use of Telegram Trading Bots:

  1. Malicious Actors and Scams: There is always a risk that the bot you are using is operated by malicious actors who could misuse your private keys, steal your funds, or sell your data to third parties.
  2. Lack of Transparency: Many TTBs do not open-source their code or undertake security audits. This lack of transparency poses a risk as it makes it difficult to assess the security of the bot and the intentions of its developers.
  3. Telegram Security Breach: If your Telegram account gets hacked, the attacker could gain access to your TTB and, subsequently, your funds.
  4. Exposure to Exploits: Since trading bots are, in essence, hot wallets used for short-term trades and transactions, they are connected to the internet, exposing them to potential exploits and vulnerabilities that hackers can take advantage of to steal your assets.
  5. Ownership and Custody Concerns: Giving trading bots access to your private keys raises concerns about ownership and custody of your assets. Recent scandals, such as the freezing of withdrawals by Celsius or the collapse of FTX, highlight the massive risks associated with handing over control of your private keys without advanced security measures and controls in place.

Basic Security Precautions for TTBs

When dealing with new and unknown tech, like Telegram Trading Bots, it is essential to prioritize your security. Following these basic precautions will help safeguard your digital assets and personal information.

  1. Use a Fresh Address: Create a new wallet address specifically for trading with TTBs and only deposit an amount you can afford to lose. This way, even if something goes wrong, your primary wallet and its funds remain safe.
  2. Conduct Thorough Research: Before using any TTB, conduct thorough research. Look for reviews, check if the bot is open-sourced, and if it has undergone any security audits.
  3. Regularly Monitor Your Wallet: Keep a close eye on your wallet and the transactions made by the bot. If you notice any unusual activity, stop using the bot immediately and transfer your funds to a safe wallet.
  4. Transfer Profits: Once you have made a profit, immediately transfer it to a safer wallet that you actually control.
  5. Two-Factor Verification on Telegram: Enable two-factor verification on your Telegram account and your wallet to add an extra layer of security.

Are Telegram Trading Bots The Right Thing for you?

TTBs are a tempting new trend, however, it is essential to carefully weigh out both the benefits and the risks. If you already trade crypto, especially low-cap tokens, on a daily basis, then you should consider using a Telegram bot as to tool to help you conduct your strategy faster.

On the other hand, if you have little to no experience with actual trading it may be better to start with a more established approach. Do not think that Telegram bots will do the hard work for you while you reap the profits. These bots are not a guarantee of success in the trading field, but rather a tool to help you do your thing more efficiently.

Read Also: Top Telegram Trading Bots (TTBs) to Choose from in 2023

We encourage you to experiment with new tech, but it has to be done in a safe environment (fresh wallet) with funds you are willing to lose. Do not fall for the “guaranteed profits” act.

Using CoinBrain to Identify Legitimate Telegram Trading Bots

A large number of TTBs are tokenized, which means that they have a native token, usually used for revenue sharing.

If a bot you are researching has a token, it will most probably be listed on CoinBrain. To conduct a simple, yet effective security check, paste the contract address or name into CoinBrain search bar in the top right corner.

In the coin profile check the liquidity section if the token has any locked liquidity:

Next up go over the security checklist to find out about some hidden red flags:

By doing this easy security check with CoinBrain you can filter out a large amount of scammy or illegitimate projects and protect your funds.

The Bottom Line

Telegram Trading Bots offer a tempting mix of convenience, speed, and potentially profitable trading strategies. However, they come with significant security risks that should not be overlooked. It is essential to be aware of the red flags, take necessary precautions, and carefully weigh the benefits and risks before deciding to use a TTB.

Tools like CoinBrain can help identify legitimate bots and add an additional layer of security. Ultimately, the decision to use a Telegram Trading Bot should be based on a thorough assessment of your risk tolerance, trading goals, and the available alternatives. Stay informed, stay cautious, and make the best decision for your financial future.

Disclaimer: The content of this piece reflects the writer's opinion. This article is not intended to provide financial advice and is meant solely for entertainment and educational purposes. Investing in cryptocurrency involves significant risk. Capital is at risk, and returns are not guaranteed. Always conduct your own research.

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