5 Ways Your Cryptocurrency May be Hacked

Over time technologies evolved and now things that seemed to be not possible several years ago become the reality. Now you can order food, services, and basically anything you need online, and pay for it without leaving home.

No surprise here, that cash payments are becoming a relic of the past. Along with wireless payments like Google or Apple pay (that still require assigning a banking account or card i.e. physical currency), the cryptocurrencies like Bitcoin are getting widely used. 

The main benefit of cryptocurrency is that it does not use banks for verifying transactions but relies on blockchain technology that uses a peer-to-peer system when money goes directly from the sender to a recipient.

The very part “crypto” means using encryption to protect the transactional data and confirm the validity of the transaction. That’s why it’s considered to be difficult to hack because there’s no centralized place for storing the data plus they are encrypted. 

However, if you think about investments in cryptocurrency you should consider taking cybersecurity courses to protect personal data, and keep this knowledge up-to-date by participating in thematic workshops, attending lectures, monitoring the trends, and reading cybersecurity news. 

Sadly, cryptocurrency is not completely hack-proof as your money is stored in digital wallets that are a much easier target than blockchain technology.

Here we go with the top 5 ways that your cryptocurrency may be hacked:

Top 5 ways that your cryptocurrency may be hacked

 

1) Phishing

The most widely spread yet effective way to steal cryptocurrency is making people give out their access themselves. It’s possible through using the forgery of legitimate websites to make them look almost like authentic and genuine people who just want to exchange cryptocurrency.

Sometimes, to increase the effect, the phishing “confirmation” emails (here is how authentic confirmation emails should look like) or “potential hack” emails are delivered to the potential targets and contain links to fake websites where you need to enter the authentication details that will be stolen from you. 

Be attentive and carefully check the domain spelling (like http://binnance.net/ instead of https://binance.com/), SSL certificate (this little padlock in the address bar) before entering any sensitive details.

2) Compromising SMS verification

This type of attack is usually specifically targeted at people who are involved in operations with cryptocurrency. As often, the 2FA is turned on via mobile phones, the main aim here is to intercept these SMS verification messages. They can be stolen via different methods such as wiretapping, cloning the SIM-Card, or vhishing (also known as voice phishing) to either confirm malicious transactions to “recover” access to the crypto wallet. 

3) Malware 

Old but gold, malware infections are still one of the primary hacking methods when it comes to crypto hacks. Infecting the device with keyloggers to steal passwords and PINs you are entering to steal them, cross-scripting injections into the web-pages so that when legitimate user enter it, they are either redirected to malicious websites that sometimes are even not noticeable in a browser to steal the sensitive details or download the malware and ransomware to users’ devices.

Good Read: Ransomware as a Service (RaaS) & Its Implications in 2021

4) Mobile applications

Unfortunately, not all crypto trading mobile applications are secure due to the poor architecture and security backdoors, thus are vulnerable to most cyberattacks like man-in-the-middle, or data leakage as API keys, and client’s sensitive info is stored in the unencrypted databases. There may be different aims for hacking mobile applications, starting from brute-force attacks to guessing the PINs or performing unauthorized actions on your behalf manipulating the market positions by creating the demand or dropping the positions for some cryptocurrencies. 

5) Stealing secret keys 

In order to perform any financial operations with cryptocurrency, you need a pair of keys: public and private. The private one is available only to its holder and is used as a digital signature to authorize a user to perform all the transactions. The public key is used to confirm the private one.  

The private key is stored in the crypto wallet, and if a user loses the private key, they can no longer use their assets. If someone gets your private key, they can easily transfer all the funds to their wallets, and since the crypto transactions are almost impossible to track, the money will be lost forever.

That’s why hackers use all the possible ways to steal the keys starting from browser extensions, applications with spell checkers, and common system vulnerabilities. The fruitful field for them is hot wallets that are connected to the internet and usually run on a centralized system. 

On the other side, there are cold wallets that are not connected to the Internet and are usually maintained as separate hardware devices. They are considered to be a more secure option but if you lose it, you can also say goodbye to all your digital assets.  

Wrap Up

The interest in cryptocurrency is constantly rising due to the potential to quickly multiply your investments. The opportunity to make easy money always comes with risks and challenges one needs to be aware of. 

Here we have to deal with high market volatility and cybercriminal threats. The numerous cryptocurrency benefits like no governmental regulation (meaning their value depends on the demand-supply mechanism and not on governmental decisions), higher speed of transactions, and confidentiality make it popular among hackers. 

The good news is that with any discovered hack, the affected platforms quickly resolve the vulnerability, the bad is that with new technologies emerge on the Internet, hackers receive more ways of penetrating into it, so you have to be extremely careful to keep your crypto assets protected. 

Published on Apr 13, 2021
Erika Rykun
Written by Erika Rykun
Erika Rykun is a content strategist and producer who believes in the power of networking and quality writing. She is an avid reader, writer, and runner. In her free time, she enjoys playing with her cat, Cola.

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