Two-Factor Authentication on a Crypto Exchange: Why SMS Is the Weakest Option

The information provided in this article is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies carries a high level of risk.

Most people protect their exchange account with whatever method the exchange puts in front of them at sign-up: a six-digit code by text message. That beats having nothing, and it is the weakest two-factor authentication in use. The reason, though, is not the one most guides give.

SIM swapping, the attack in which someone has your phone number moved to their own SIM card, has been in retreat for three years. The FBI complaint centre IC3 logged 2,026 reports with $72.7 million in losses in 2022, 1,075 reports with $48.8 million in 2023, 982 with $26.0 million in 2024 and only 971 with $17.4 million in 2025 (IC3 Annual Report 2023 and 2025). The real problem lies elsewhere. Against an attacker who lures you onto a fake login page in real time, neither an SMS code nor an authenticator app is any help. Both hand over exactly the code that attacker needs at that moment.

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