API keys: where to get them and how to protect your account from hacking

If you actively use cryptocurrency exchanges and trading bots, you are probably familiar with the term API key. But do you know where to get the API key and how to use it correctly? It turns out that improper handling of this tool can lead to loss of funds and compromise of the account.

Why are API keys needed and how do they work

An API key is not just a random string of characters. It is a unique code that allows applications and bots to access your account and perform operations on your behalf. The principle is simple: when you give permission to a program to use your API key, you are effectively granting it access to confidential data, just as if someone had learned your password.

Imagine a situation: you want to connect a trading bot to the exchange. The exchange generates an API key for you, which is used to identify your application. When the bot sends a request to place an order or check the balance, this key is sent along with it — confirmation that the request is indeed coming from you.

Main functions of API keys: authentication and authorization

API operates on two basic principles. Authentication is the verification of who you are (like a login and password). Authorization is determining what exactly you are allowed to do (which operations are available). The API key acts as a password for applications, confirming your identity to the system.

Some systems use multiple keys simultaneously: one key for authentication and another for creating cryptographic signatures that confirm the authenticity of the request. This is similar to how seals were used in the Middle Ages to verify the authenticity of documents — each seal had a unique design that was impossible to forge.

Cryptographic Signatures: An Additional Layer of Protection

Modern systems use cryptographic keys of two types: symmetric and asymmetric.

Symmetric keys imply the use of a single secret code for signing data and verifying the signature. This is a fast method that requires less computational power. An example is HMAC — an algorithm that cryptographically protects data with minimal resource costs.

Asymmetric keys operate on a different principle: two different but cryptographically related keys are used. The private key (secret) is stored only by you and is used to create a signature. The public key is known to everyone and is used to verify the signature. This provides a higher level of security, as the system can verify the signature without access to the secret key. A classic example is the RSA key pair, widely used in cryptography.

Where to get the API key and how to generate it correctly

Do not look for an API key on the internet or buy it from third parties — this is extremely dangerous. Instead, follow this simple scheme:

1. Log in to your account on the exchange or platform
2. Go to the security or API management section
3. Click the “Create New API Key” button
4. The platform will generate a unique key specifically for you.
5. Copy the key and store it in a secure location.

Each API key is generated specifically for a particular user and cannot be used by anyone else ( while adhering to security measures ).

Security Threats: Why API Keys Are a Target for Cybercriminals

History knows many cases where attackers hacked online databases and stole API keys in large quantities. Why are API keys so attractive for cyberattacks?

First of all, they provide access to important system operations: requesting personal information, checking the balance, withdrawing funds.

Secondly, many API keys do not have an expiration date, so a stolen key can be used by malicious actors indefinitely until it is revoked.

Thirdly, the theft of the API key often does not raise the user's suspicion until unusual transactions or a sharp decline in balance become visible.

5 rules for the safe use of API keys

Rule 1: update your keys regularly. Just as systems require password changes every 30-90 days, try to change your API keys with the same frequency. Remove the old key and create a new one — it will take a few minutes.

Rule 2: create a whitelist of IP addresses. When creating a new key, specify which IP addresses can use it. If the key falls into the wrong hands, it will not work from an unknown address. Additionally, you can create a blacklist of blocked addresses.

Rule 3: use multiple API keys. Don't put all your eggs in one basket. Create a separate key for each trading bot or application. This way, if one key is compromised, the others remain safe. Assign a whitelist of IP addresses to each key.

Rule 4: store keys in a secure place. Never save API keys in a plain text file on your desktop, in unencrypted cloud storage, or on a public computer. Use password managers with encryption or specialized services for managing sensitive data.

Rule 5: do not share your keys with anyone. This is an absolute prohibition. Transferring your API key is equivalent to sharing your account password. The third party gains all the capabilities that you have. If the key is leaked, immediately disable it in the settings.

What to do if the API key is compromised

If you suspect a key leak:

1. Immediately disable the key in the account control panel
2. Create a new key with stricter restrictions
3. Check the transaction history and balance for suspicious activity
4. Change the password of the main account
5. If there were financial losses, take screenshots of all information about the incident and contact platform support.
6. File a report with the police, it increases the chances of a refund

Conclusion

The API key is a powerful tool that requires a respectful approach to security. Remember: the responsibility for protecting the key rests entirely with you. Treat API keys with the same seriousness as your account passwords. Follow security recommendations, regularly update your keys, never share them with anyone, and your account will remain secure. Knowing where to obtain the API key and how to use it correctly is the first step towards protecting your crypto assets.