Cybercriminals have been cashing in on the crypto industry for many years, taking advantage of the fact that the market is young and many people invest money in it without fully understanding how it works. Therefore, attackers easily use both gaps in the protection of cryptoplatforms and naive investors, stealing money and personal data from them. Therefore, in order not to get hooked by intruders themselves, let’s analyze the most popular types of crypto attacks.
The idea of cryptojacking is simple – attackers are trying to mine cryptocurrency on other people’s devices by infecting them with special cryptojacking software. By infecting the victim, attackers can easily make money using the computing power of an unsuspecting user without spending a penny. In addition, cryptojacking software usually works in such a way as not to attract attention to itself, which makes it much more difficult for an ordinary user to detect a malware and remove it.
What we recommend: monitor the performance of the device (cryptojacking software usually slows down the system very much) and keep an antivirus solution at hand to always stay safe.
- Dust attacks
To make it clearer, let’s first analyze the meaning of the term “dust” in the cryptosphere.
Dust is such a small amount of coins or tokens that often people just ignore it. For example, the smallest unit of Bitcoin is 1 satoshi (0.00000001 BTC).
The attackers found a way to use the dust – they began to scatter it on random crypto wallets, and then track all transactions of “dusty” wallets, linking crypto addresses with companies and individuals who are behind them. Having collected a sufficient amount of information, the attackers begin to intimidate the victim, threatening to merge her personal data into the network if a certain amount in cryptocurrency is not paid. Usually, the victims of such an attack are people who store large sums on their crypto wallets.
- Private key theft
When it comes to managing cryptocurrency, a private key is an incredibly valuable piece of data. This random set of letters and numbers is used to create a digital signature, without which it is impossible to conduct any transaction with cryptocurrency. But if a hacker gets access to the private key, then he, in fact, gets access to all the victim’s personal data.
To reduce the likelihood of a private key, it is extremely important to choose a reliable crypto wallet. Hardware wallets are usually much safer than software wallets, but neither are protected from hacking. The best thing you can do is to find a wallet with the highest level of security that uses PIN codes, backup seed phrases, biometrics and timer blocking.
Remember: under no circumstances can you transfer your private key to anyone. It should be available only to you.
- Phishing attacks
Phishing is a favorite method of cybercriminals, whether it’s cryptocurrency scams or other cyber fraud. Phishing is universal and can be used in a variety of scenarios. Therefore, it is not surprising that crypto criminals prefer to use this technique to deceive their victims. Not all crypto–phishing attacks are the same, since different cybercriminals are looking for different data, although their ultimate goal is almost always the same – making money.
What to do to avoid becoming a victim of phishing: use websites and antivirus software that automatically checks links, as well as anti-spam filters. Do not follow links from emails that have fallen into spam or from unknown senders.
- Fraudulent ICOs
ICO (initial coin offering – the release of the internal cryptocurrency of the blockchain project and their sale to investors) is a common phenomenon in the crypto industry. It is through this method that crypto startups can raise funds by selling their own coins or tokens to interested investors. This is a reliable way to accumulate funds, but it can also be used by cybercriminals.
Fraudulent ICOs attract funds from naive investors and disappear as soon as they collect enough money.
In order not to become a victim of this kind of fraud, remember a few simple things:
All legitimate ICOs should have a clear and understandable white paper – a document that describes the very idea of the project and the purpose of attracting money;
Find out who is behind the project and find their pages in social networks.
- Rug Pull
Rug pull is a common fraud scheme where developers withdraw funds from a project and disappear with them. In English, the phrase rug pull — “pull out the rug (from under your feet)” – means to suddenly deprive someone of support. In the cryptocurrency sphere, this action is understood as emptying the liquidity pool on the exchange.
At the same time, token holders remain with illiquid assets.
In order not to be left with illiquid tokens on hand, do not forget about the white paper and checking how much cryptocurrency the developers themselves have.
Let’s summarize the results
Today, fraud and various kinds of attacks have become commonplace in the crypto industry. Over the past ten years, cybercriminals have developed many fraudulent schemes focused on cryptocurrencies, and every year they make them more and more difficult. Therefore, in order not to become a victim of intruders, keep in mind information about possible crypto attacks and our tips for protecting against them.