Cryptocurrency hacking is actively spreading since the rise of Bitcoin made people believe it’s possible to become rich overnight easily. Although not only popular coins are being stolen, such meme coins as Dogecoin are hackers’ targets too. Many scammers are trying to abuse this idea and creating new fraudulent schemes constantly. How to avoid cryptocurrency hacks and secure your crypto payments? You will find the answer in the article below.
What Is Cryptocurrency Hacking
Cryptocurrency hacking is basically stealing cryptocurrencies. To organize crypto hacking, hackers use phishing schemes and other attack tactics. Over the past decade, hundreds of millions of dollars worth of crypto coins have been stolen due to cryptocurrency wallets hacks.
How Hackers Steal Crypto
There are a lot of typical scenarios used for stealing funds from crypto holders. We present you the list of the most widespread examples:
1. Network attack
Cryptocurrencies and the Blockchain itself are decentralized, they operate independently of governments or banks. There’s no central server even which could be a potential target for hackers. Although, if a network member had at least 51 percent of the computing power, they are able to control the development of the transaction record. This would allow attackers to spend their coins more than once. An example is the Ronin Network hack when more than $600 ETH was extracted by hacking the Ethereum-linked blockchain itself.
2. Private address hacks
The other way to hack cryptocurrency wallet is to get access to someone’s private keys. This is mathematically impossible to calculate, so the way frauds prefer to get these keys is to just steal them or trick holders into giving their private keys away. If the user’s private key is securely kept, there is no way it will be stolen.
3. Cryptocurrency exchange hacks
Remember the infamous Mt. Gox hack when 650,000 BTC leaked from the exchange? Exchanges and other cryptocurrency services are potential targets of hacking as they are often not so well protected.
The services keep a part of their users’ funds in “hot” storage, which allows people to exchange coins quickly. These exchanges also hold their clients’ private keys and passwords so they are vulnerable to hacking. it’s advised not to keep funds in the exchange for a long time and transfer them to your wallet right after the transaction.
4. Fraudulent investment funds and exchanges
There are companies that are trying to act like legit services simultaneously promising their clients oversized returns. These schemes always lead to giant losses for investors.
Common Types Of Crypto Scams
1. Bitcoin investment schemes
In these schemes, a person contacts investors and tells them they are investment managers and claim to do millions investing in crypto. They promise to make their victims millionaires too. First of all, they are asking for a starting fee. They also may ask for personal information. Scammers often impersonate celebrities and appear to the investors as them, advertising some kind of scheme of gaining money.
2. Rug pull scams
Rug pull scams involve announcing a “new project” and raising funds for it. After getting the money, scammers disappear. Rug pull scams are also common for NFTs, one-of-a-kind digital assets.
3. Romance scams
Sometimes in dating apps, you can encounter an attractive person who is more likely to live far away from you and you two communicate strictly online. The person is trying to gain your trust and then asking you to buy or give them money in some kind of cryptocurrency.
4. Phishing scams
Believe it or not, phishing schemes are still popular. These schemes involve mass sending emails containing malicious links to fake websites created to gather personal info, such as passwords and wallet keys. To avoid being a victim of such a scheme, never open suspicious links and send personal information by email.
5. Man-in-the-middle attack
When logging into an account in a public place, scammers may steal your private information sent over a private network. Same with the public Wi-Fi use – someone can intercept the signal and steal your password or private key. To avoid it, use VPN.
6. Social media cryptocurrency giveaway scams
Many fraudulent posts on SNS promote bitcoin giveaways. When a person clicks on a giveaway link, it takes them to a fake site asking for personal info for verification purposes. Verification may also include asking for a payment or “paying a fee”.
7. Employment offers and fraudulent employees
Another scam scenario is impersonating recruiters offering an interesting job but requiring crypto as payment for job training.
What If A Hacking Attack Has Already Been Detected
1. Run a Malware Scan
Some hackers can access your device to hack your cryptocurrency wallet without using any special programs but most of them use malware programs to steal your personal information. Scan your device with an antivirus app and it will destroy the malware software.
2. Transfer Your Funds
If you are lucky and there is still crypto in your wallet, transfer all the existing funds to another wallet.
3. Notify Your Wallet or Exchange Provider and the Authorities
It’s important to notify providers about the problem so they enhance their service’s cryptocurrency security measures. Some exchanges offer insurance if the funds are stolen by hackers, so this is another good reason to do it.
In any case, notify the police and give them all the relevant information to help the investigation.
4. Change Your Login Details and Use More Security Features
Change your login and password immediately and use a complicated combination of symbols for better protection. Use password managers to avoid forgetting your passwords. Moreover, search for the wallet with the most number of protection measures.
Cryptocurrency And Security: Prevent Cryptocurrency Hacking
Store your cryptocurrency in a “cold” wallet
The first step is to store your funds in a hardware wallet. Only keep a small amount of crypto online for small transactions and keep the main part offline. A cold crypto wallet is a device that holds private keys which are used to access your crypto assets. Never share your private key with anyone and try not to lose the device as losing your keys means losing all of the currency you hold in a wallet.
Use a reputable exchange to buy/sell
Some exchanges are more secure than others, that’s why consider doing the research before using one of them. Find out if the exchange in question has been compromised in the past because if the exchange is hacked, it shows the system’s vulnerabilities.
Most exchanges won’t ensure your investment in the case of a cyber attack, so choose solutions with multiple protection methods.
Use MFA
MFA creates a layered defense. It uses passwords, biometrics, security tokens, and other factors to verify that the account is yours.
Separate cryptocurrency and personal/work devices
Use separate devices for personal or work accounts and cryptocurrency management accounts. Consider creating an email dedicated to your crypto wallets and exchanges only. Never access your crypto-dedicated accounts from a public computer.
Install updates automatically
If you have ever thought about bragging about cryptocurrency investment success on social media, we are kindly asking you not to do it if you don’t want to become a target of hackers. Trade crypto anonymously to remove any connection to your identity. Do not share information about your trading activity, the exchange you use, or your gains and losses.
Stay up to date with the latest threats
Keep up to date with the news on attacks or threats and protect cryptocurrency if your crypto wallet is vulnerable.
How Do You Protect Your Bitcoins Against Theft And Hacks?
There is a list of things you should integrate into your daily life to avoid hacking as successfully as it is possible.
Use Multiple Wallets
Cold wallets are the best for the secure storage of cryptocurrency. Consider buying one if you are serious about investing, it will help you a lot and maybe even save your money. This type of wallet needs a connection to another device such as a tablet, phone, or computer. Cold wallets keep your keys isolated from the internet which gives a lot of protection.
Use hot wallets for storing small amounts of money needed for quick transactions. These wallets are less secure due to them needing an internet connection to operate. Nevertheless, they are much more convenient so combining hot and cold wallets might be the best choice.
Use A Secure Internet Connection
Don’t access your online crypto exchange or other cryptocurrency accounts through public Wi-Fi. Use VPNs to maintain your data privacy and avoid tracking your activity.
Regularly Change Passwords
Create a complex password as with the technologies constantly evolving it’s easy to get your password breached. Store your password safely and change it often. Do not reuse passwords on several wallets. Do not include any personal information in your password.
Avoid Phishing Links
Do not use SMS as one of the authentication methods. Sim swap scam is very popular among fraudsters as it’s easy to put into action. The scammer simply convinces your telecom company to transfer your number to theirs.
Do not use the same password across your accounts and store your passwords in password managers.
When creating a new crypto wallet account, the software generates a seed phrase you need when recovering your access to the wallet. Keep your seed phrase safe and private.
