You may be aware of cryptocurrency, but did you know there are many different types and even more ways to hack it? From malware that infects your computer to phishing scams designed to trick you into giving your private keys over, there are plenty of ways to get hacked while dealing in cryptocurrency. The vast majority of cryptocurrency hacks go unpunished, but it doesn’t have to be that way. Cyber criminals have stolen cryptocurrency to the tune of billions from investors, cryptocurrency exchanges and users. If you’ve experienced cryptocurrency losses due to hacks, it’s crucial to try to figure out what happened so you can attempt to seek justice. That said, here’s a look at 6 crypto hacks to know about, and you can read more about SIM Swap hacks here.
Types Of Cryptocurrency Hacks
Even the most secure networks are at risk today from cybercriminals. Businesses must accept and protect against these opportunistic hackers. We list six techniques used by cybercriminals to attack blockchain networks that are supposedly unhackable, even though blockchain has certainly improved transparency and security in digital transactions.
1) Exchange hacks can be devastating
Exchange hacks are some of the most devastating of all cryptocurrency hacks because they typically involve stealing the coins from your exchange wallet where you store your funds. But there’s no need to fret, as there are steps that you can take to make sure this doesn’t happen to you.
First and foremost, protect yourself by enabling two-factor authentication on your account. This means that every time you login, it will ask for both your password and a unique code generated from an app on your phone or email before logging in. You may be wondering how hackers could get through this system if they don’t have your password and 2FA is protecting your account.
Hackers usually use what is called social engineering: pretending to be someone else (e.g., customer service) and tricking the support team into providing their username and PIN, which allows them to access 2FA codes. You might also want to enable a limit on the amount of crypto that can be transferred from your account at any one time so you’ll have time to react if something goes wrong; just contact customer service so they can reset the limit for you.
Once you have been hacked, your tokens will likely be lost forever, even if the exchange you were using is willing to cooperate with law enforcement. The best way to avoid being hacked is not to store tokens at an exchange in the first place.
What is an exchange?
When you first enter the world of cryptocurrency, you’ll be presented with a slew of different exchanges. You may be asking yourself What is an exchange? An exchange is basically a place where people can buy and sell cryptocurrencies. They’re like stock markets, but for digital currencies.
2) Cryptocurrency Phishing Attacks
Phishing attacks disguise themselves by impersonating a third party the victim might trust, or send a legitimate-seeming email or text message asking for sensitive data like credit card numbers. Phishing is a form of online attack, a tactic in which hackers will fake an email to persuade you to divulge sensitive information like usernames and passwords, then break into your account.
There’s also been a rise in fake SMS messages to try to steal your credentials and cryptocurrencies, as well as Discord and other messaging services. Hackers are using any possible way to get at your assets.
3) Viruses & Malware
Another hacking strategy involves planting viruses, Trojan horses, and other malware on your computer or mobile device. The most common way for hackers to plant these kinds of malicious programs is by embedding them in legitimate looking software, often downloaded as apps on smartphones.
In one instance, hackers tricked victims into downloading malware disguised as security updates from Microsoft by using security certificates which were not issued by Microsoft. To avoid this type of attack, be wary if asked to download software updates that you did not initiate yourself; always look at the site where these types of updates are being offered before downloading anything; and only download programs that come from a verified developer site like Apple’s App Store or Google Play store.
4) Typosquatting
Typosquatting is a scam which happens when hackers set up a phony website, typically from one focused on cryptocurrency, with the intention of getting private data from their users and using it to sign in to and impersonate the user’s personal accounts. When they input their username and password into a site, they unwittingly give the site’s creators all the information they need to hack into their cryptocurrency wallets.
One way to avoid this scam is by checking for typos, making sure there are no spaces before or after any letters, and that you don’t enter any punctuation marks. Additionally, make sure that you’re entering your URL correctly; if you type coindesk instead of coin desk, your login could still be compromised.
5) What’s A Routing Attack?
In a routing attack, hackers intercept data as it is sent to an ISP and split the network of computers (or nodes) into pieces. Although one partition of the network is functioning normally, the others are unaware of it. During the breakdown of the partition, the hacker creates large amounts of fraudulent transactions which are legitimated by the network when the partition comes down.
A man-in-the-middle attack is a form of electronic eavesdropping in which a hacker or interceptor, between your computer and a website that you are accessing, substitutes himself for your original computer. The hacker can then see what you type into your browser as well as steal data from you as it is transferred to and from websites.
6) The 51% Attack
A 51 percent attack occurs when a user or group of users gains majority control over the hash power available on a given blockchain system. This allows them to rewrite transaction histories and do double spending. Tokens may be re-used after a double spend as transactions are erased once the goods are received.
Cryptocurrency Stolen Or Hacked?
Fortunately, in most cases, individual hackers would struggle to carry out a blockchain-targeted attack without enough time, effort, and patience. By working in teams, cybercriminals, for example, could cover the cost of mining fees in Sybil attacks. As such, a collective and continuous response is required from the technology community. Much of this relies on the behaviors of users, investors, and exchanges. One of the most important steps is to dispel the myth that blockchain is unbeatable in terms of security.
If you or someone you know suffered significant cryptocurrency losses due to negligence by another company or party and are looking for legal favor, we can help you seek the justice you deserve. Additionally, if you had your cryptocurrency stolen if you held it on an exchange or broker dealer, you may be able to seek justice.
