diff --git a/quantara/web_app/api/referal.py b/quantara/web_app/api/referal.py
index 90095950..9ecc7d96 100644
--- a/quantara/web_app/api/referal.py
+++ b/quantara/web_app/api/referal.py
@@ -13,7 +13,7 @@
 - 404: If the user with the provided wallet ID does not exist.
 """
 
-import random
+import secrets
 import string
 
 from fastapi import APIRouter, Depends, FastAPI, HTTPException, Query, Request
@@ -30,6 +30,8 @@
     responses={404: {"description": "Not found"}},
 )
 
+_ALPHABET = string.ascii_letters + string.digits
+
 
 class ReferralResponse(BaseModel):
     """ 
@@ -40,9 +42,12 @@ class ReferralResponse(BaseModel):
     referral_code: str
 
 
-def generate_random_string(length=16):
+def generate_random_string(length: int = 16) -> str:
     """
-    Generate a random string of letters and digits with the given length.
+    Generate a cryptographically secure random alphanumeric string.
+
+    Uses the ``secrets`` module (CSPRNG) instead of ``random`` so referral
+    codes cannot be predicted from prior outputs (see issue #196).
 
     Args:
         length (int): Length of the string (default is 16).
@@ -51,7 +56,7 @@ def generate_random_string(length=16):
         str: Randomly generated string.
     """
 
-    return "".join(random.choices(string.ascii_letters + string.digits, k=length))
+    return "".join(secrets.choice(_ALPHABET) for _ in range(length))
 
 
 @router.get("/create_referal_link")
diff --git a/quantara/web_app/tests/test_create_referal_link.py b/quantara/web_app/tests/test_create_referal_link.py
index b64b3f65..f14711bc 100644
--- a/quantara/web_app/tests/test_create_referal_link.py
+++ b/quantara/web_app/tests/test_create_referal_link.py
@@ -88,3 +88,55 @@ def test_create_referral_link_for_multiple_users(client, mock_get_user_by_wallet
     assert referral_code1 != referral_code2
 
 
+def test_generate_random_string_uses_secrets_not_random():
+    """Referral codes must come from secrets (CSPRNG), not random."""
+    import inspect
+    import random
+    import string
+
+    from web_app.api import referal
+
+    source = inspect.getsource(referal.generate_random_string)
+    assert "secrets" in source
+    assert "random.choices" not in source
+    assert "random.random" not in source
+
+    alphabet = string.ascii_letters + string.digits
+    code = referal.generate_random_string(16)
+    assert len(code) == 16
+    assert all(ch in alphabet for ch in code)
+
+    # Sanity: many draws stay unique enough that collision is rare.
+    codes = {referal.generate_random_string(16) for _ in range(200)}
+    assert len(codes) == 200
+
+
+def test_generate_random_string_character_distribution():
+    """Rough uniform distribution over the 62-symbol alphabet (10k draws)."""
+    import string
+    from collections import Counter
+
+    from web_app.api.referal import generate_random_string
+
+    alphabet = string.ascii_letters + string.digits
+    draws = 10_000
+    length = 16
+    counts = Counter()
+    for _ in range(draws):
+        counts.update(generate_random_string(length))
+
+    total = draws * length
+    expected = total / len(alphabet)
+    # ±0.5% absolute frequency band around 1/62 as specified in #196.
+    for ch in alphabet:
+        freq = counts[ch] / total
+        assert abs(freq - (1 / len(alphabet))) <= 0.005, (
+            f"char {ch!r} frequency {freq:.6f} outside ±0.5% of 1/62"
+        )
+    # Entropy floor for 16 alnum chars: log2(62^16) ≈ 95.3 bits.
+    import math
+
+    entropy_bits = length * math.log2(len(alphabet))
+    assert entropy_bits >= 95
+
+