There is no denying that cybercriminals have been capitalizing on the cryptocurrency industry for years. With this market still a bit in its early stages, many people invest without fully understanding cryptocurrencies. Malicious actors can take advantage of both unsafe platforms and naive investors to steal data and make a profit. So, let’s discuss the most common crypto scams and attacks being used today.
Today, the crypto mining industry is undoubtedly huge, with millions of miners around the world looking to make a profit by securing blockchain networks. But with mining so profitable, malicious actors have focused on it too, looking for ways to capitalize on the mining industry without using their own specialized hardware.
this is where enter cryptojacking. This cybercrime involves the unauthorized use of a victim’s mining hardware for mining rewards. Mining hardware can be quite expensive both to buy and to operate, and even mining crypto on a regular laptop can consume a lot of power and increase your electricity bill. This factor drives many people away from the idea of crypto mining.
But by hijacking someone else’s hardware, cryptojackers can make a huge profit without spending much of their own computing power. Cryptojacking software, which is what is commonly used in this company, can run on one’s device without attracting attention, making it an even harder problem to notice. However, if you notice that your device is running much slower than usual, cryptojacking software may be to blame.
Because cryptojacking software is often a form of malware, you should always make sure all your devices are equipped with antivirus software. This should be standard practice across the board and can save you from many other types of malware.
2. Dust attacks
In the cryptocurrency realm, the term “dust” is used to refer to tiny and insignificant amounts of cryptocurrency that may remain after a transaction. These amounts are so small that they have no real financial value. However, the dust can be maliciously exploited to invade the privacy of crypto wallet holders.
In crypto dust attacks, the malicious actor will perform a dust transaction (i.e. send dust to) multiple wallet addresses. By doing this, the attacker does not lose financially, but can later find out the identity of the target wallet holders. This information can be used to further target the individual, for example through a phishing scam.
Those with large amounts of crypto are often the target of dust attacks, as the attacker has much more to gain.
3. Private key theft
When it comes to managing cryptocurrencies, a private key is incredibly valuable data. This random line of letters and numbers can be used to authorize transactions with your crypto. Private keys are often kept in cryptographic wallets, which can come in the form of software or hardware designed to provide a secure storage option.
With your private key, a threat actor essentially has access to your crypto. Most likely, if a cybercriminal were to get the private key from him, he would deplete his wallet as soon as possible.
To reduce the chances of private key theft, it is essential that you choose a reputable and reliable wallet with strong security features. Hardware wallets are generally much more secure than software wallets, but neither is immune to attack. The best thing you can do is find a wallet with the highest levels of security, including PINs, backup seed phrases, biometric logins, and timed locks.
Also, you should never share your private key with anyone. Even if you trust a person, if you don’t securely store the information you’ve provided, it could result in your assets being stolen. If possible, only you should have access to your private key.
4. Phishing scams
Phishing is one of the favorite methods of cybercriminals, be it for crypto scams or other cyber scams. Phishing is very versatile and can be used in a wide variety of scenarios. So it’s no surprise that crypto criminals have chosen to use this technique to scam their victims.
Crypto phishing attacks are not all the same. Different cybercriminals are looking for different data, although the ultimate goal is almost always financial gain.
Take the Coinbase phishing scam, for example. In this malicious campaign, cybercriminals would send emails to Coinbase users claiming that they needed to provide information due to some kind of problem with their account, such as suspicious activity. Some Coinbase users interacted with these malicious emails, fulfilling the requests and providing the required information.
By the end of 2021, more than 6,000 Coinbase users were affected by a phishing campaign designed to steal sensitive data. In this wave of attacks, scammers posed as legitimate Coinbase staff and claimed that the targeted user’s account had been locked. To remedy this, the user needed to log in again and was provided with a link to the login page within the email.
However, this link leads to a phishing site that could steal login credentials when entered. Using the login information, the attackers could log into the victim’s Coinbase account and access the victim’s funds.
There are numerous ways to avoid falling for a phishing scam. Link checking websites, antivirus software, spam filters, and other tools can help protect you from such threats. Also, if you receive an email from what appears to be a trusted party asking you to log into your account, do not click on the link provided. Instead, go to your browser and access the login page through your search engine.
5. Fraudulent ICOs
ICOs, or Initial Coin Offerings, are common in the cryptocurrency industry. It is through this method that cryptocurrency-related startups can raise funds by selling their own coins or tokens to interested investors. This is a solid way to accumulate funds, but it can also be exploited by cybercriminals.
A fraudulent ICO is likely never to become a legitimate platform. Rather, they pose as potential companies looking to raise funds for their business and then go live once they have amassed enough money. Depending on how smart the cybercriminal is, fraudulent ICOs can be extremely convincing. But there are red flags to be aware of when considering investing in an ICO.
First of all, all legitimate ICOs must have a whitepaper. Basically it is a detailed plan of the project in question. A scam ICO will often not have a whitepaper or use a version copied from a legitimate platform. They can also create their own fake white paper, but it’s likely to be vague, sloppy, or just plain pointless.
It is also helpful to become familiar with the alleged team behind an ICO. In the crypto space, it is incredibly common for CEOs, developers, and entrepreneurs to have some kind of online presence. This usually comes in the form of a Twitter or Instagram account. So if you can’t find any of the ICO team members listed online, it’s possible they just don’t exist.
6. Crypto to pull the rug
Cryptocurrencies to pull the rug are another worryingly prevalent scam in the cryptocurrency industry. A carpet crypto will often garner a lot of publicity through marketing, making big claims, or promising things that are too good to be true.
If a coin gets enough of a buzz, hordes of people will start investing. This, in turn, will increase the price of the coin. Once the scammer has caused a sufficient price increase, they will sell all of their cryptocurrency holdings, getting rid of them and making a huge profit. This big dump will cause the asset price to plummet, leaving investors empty-handed.
Again, you should always refer to the whitepaper when considering investing in a new crypto. You should also check the online presence of the creators of the crypto and see what part of the total supply they have. Rug scammers often hold onto a large proportion of the crypto supply so they can sell large amounts once the price has risen. Consider this another red flag.
Crypto crime is now frighteningly abundant
Today, scams and attacks are a common thing in the cryptocurrency industry. Cybercriminals have developed numerous cryptocurrency-focused scams over the past decade, and they are getting smarter every year. If you own any kind of crypto or are considering investing, make sure you are aware of the most common crypto attacks out there to reduce your chances of being scammed.