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Cryptocurrency Wallet Hacking

How Hackers Hack Crypto Wallets and How to Protect Yourself

The crypto industry is on the rise, but there are still some important concerns about its safety. Many users these days search for “Hack Crypto Wallet” on search engines to see if their wallets can be hacked. The answer is, unfortunately, a big YES.

That’s why we’ve gathered a complete guide to different methods of hacking digital currency wallets and how you can protect yourself from hackers who want to hack crypto wallets.

Can Cryptocurrency Be Hacked?

Let’s answer this question in more detail.

The fact that blockchains must choose between decentralization, security, and/or scalability is central to how they function. To compensate, modern cryptocurrencies’ architecture includes significant built-in security features, such as decentralized applications (DApps) and NFTs.

Can Cryptocurrency Be Hacked?

Immutable data blocks cannot be reversed or hacked once they have been added to the blockchain database.

Despite its structure, hackers have gained millions of dollars each year due to flaws in the bridge, protocol, and human security.

Users can defend themselves against hackers taking advantage of system flaws and abusing existing smart contracts by using secure crypto wallets to keep themselves safe.

As a result, we can say yes, blockchains are secure. Cryptographic techniques and consensus mechanisms used by network participants are used to secure the blockchain itself.

Nevertheless, there are many reports of people that can hack a crypto wallet, which is the place you store your cryptocurrency. So it’s essential to pay attention to the safety of your wallet.

Hacker Techniques Used to Access Crypto Wallets

It’s good to take a closer look at different strategies hackers use to get into your wallet. This way, you can be ready for them and prevent many problems.

Hacker Techniques Used to Access Crypto Wallets

Phishing Attacks

The phishing attack is when hackers want to entice users to do ‘the wrong thing,’ such as clicking on a harmful link that downloads malware or directing them to a fraudulent website.

There are generally four types of phishing attacks:

  1. Spear Phishing: It focuses on customizing messages for specific people. The purpose is to entice you to reveal sensitive information.
  2. Whaling: It’s actually a complex type of spear phishing in which hackers attack high-level holders or play their role in deceiving you.
  3. Vishing: It’s a highly successful and targeted style of spear phishing that targets individuals by enticing them to share personal information via speech. Because hackers use artificial intelligence (AI) to mimic speech patterns, it is becoming increasingly difficult to spot this kind of phishing.
  4. Email Phishing: As it comes from the name, hackers use email to deceive you. For example, fake invoice scams, email account upgrade scams, advance-fee scams, and Google Docs scams are common types of email phishing attacks. Tools like SPY24 can be useful in you want to be sure about your emails.
Phishing Attacks

Here are some signs of phishing attacks:

  • An unusual greeting from unknown sources.
  • Grammar or spelling errors in messages and emails.
  • Email addresses that don’t match domain names.
  • Weird content or unsolicited requests.
  • Unusual Call to Action emails.
  • Changing the domain, for example, from Binance.com to Binance.co

Fake Hardware Wallets

Crypto and personal data are also being stolen from unsuspecting crypto users using fake hardware wallets.

You should be aware of this type of digital currency wallet hacking. Hackers usually focus on individuals who already have a hardware wallet. Hackers entice such individuals to use a customized replacement for their hardware wallet that was created to steal digital cash codes.

The user gets a package containing a modified hardware wallet in the first section of this trick. A warning message is usually included in this package, telling the user that their current mobile phone is insecure and should be replaced by a supplied wallet.

Fake Hardware Wallets

It’s worth noting that customers are never asked for their recovery codes by hardware wallet vendors. Moreover, unless you officially request it, they will never send a replacement.

The user is usually prompted to hook the device up to the computer and input their digital currency wallet’s recovery code in the sent alternative. When the code is entered, it’s sent to the hackers, and they hack crypto wallet and you’ll lose your money.

SMS 2FA Verification Exploits

The second method of hacking is exploiting 2FA verifications via SMSs. As you know, SMS is one of the most popular forms of two-step verification (2FA) nowadays. Yet, we observe that it is often misused in many circumstances.

By substituting SIM cards, malicious actors and hackers may intercept authentication text communications.

SMS 2FA Verification Exploits

Forging a user’s identity and manipulating telecommunications workers into transferring ownership of the SIM card number are two examples of SIM card replacement strategies.

Also, there are many parental control tools like SPY24 that can be misused to get into your SMSs, especially 2FA messages.

Hackers can intercept 2FA communications connected to a user’s digital currency wallets when transferring the account. This way, they can hack Crypto wallets and steal your money.

In fact, SMS is one of the 5 means of hacking 2FA verifications. Here are other means of exploiting verifications:

  1. Attacking the supply chain
  2. Bypassing MFA authentication workflow
  3. Pass-the-cookie
  4. Server-side forgeries

Bridge Hacks

A bridge hack is another type of threat you might face in the crypto industry. They’re responsible for over a whopping $1.3 billion stolen cryptocurrencies in the last year.

Wormhole Bridge, with $325 million in February, is regarded as the biggest crypto bridge hack in the world.

The idea of crypto bridges was to make transferring tokens between blockchains straightforward and secure. But now, it’s used to hack your wallets.

There are two types of bridge hacks:

  • Code attacks: this hack exploits vulnerabilities in smart contracts
  • Attacking a network’s design: It’s often accomplished through social engineering.

After knowing about million-dollar exploits, many Web3 users avoid using bridges because they fear them to be vulnerable.

Users must be cautious before delegating their crypto to these protocols, despite the fact that bridges are a valuable aid in DeFi.

The Web3 ecosystem and the cryptocurrency market, in general, are both fascinating subjects to explore at Worldcoin.

Bridge Hacks

Exchange Hacks

Even though crypto exchanges employ several techniques to safeguard their holdings, skilled hackers may overcome them.

Since they often include open-source code packages, exchanges are targeted on a regular basis.

Because a single break-in might result in the assets of thousands of people, criminals prefer to attack crypto exchanges.

One of the most considerable crypto exchange hacks in 2022 is the $625 million hack on Ronin Network. Although all crypto exchanges can be hacked, it’s said that Coinbase has never been directly hacked.

CeFi vs. DeFi Hacks

Centralized and decentralized finance can both be hacked. If you want to retain control of the blockchain technology in your hands without entrusting it to any governmental body, choose a DeFi model.

Yet, if you want to build a system that provides your users with an assurance that their data and crypto are being looked after by a central authority, then go with CeFi.

There are flaws in both systems. Smart contracts carry technological risks, and regulation is yet to be developed, while DeFi users keep complete custody of their crypto.

Depending on their security standards and internal procedures, licensed and regulated CeFi platforms may also be hacked.

Trojans

Trojans

To attack popular computer architectures such as Windows and macOS, hackers employ various versions of malware, especially Trojans.

Trojans, also known as Trojan horses, are software that disguises their real nature to trick a user into thinking it’s a safe file. The “payload” carried by a Trojan, like the wooden horse used to sack Troy, is unknown to the user; nevertheless, it can serve as a delivery vehicle for a range of threats.

Remote access trojans are designed to help hackers remotely access and control your infected device.

These are programmed to swap the addresses of stolen digital money with hacker wallet addresses whenever they detect them. Digital currencies are frequently sent to unsolicited hacker-controlled addresses after successful exchanges.

Keyboard Spy

Keyboard Spies or keyloggers are a type of monitoring technology that monitors and records each keystroke on a specific computer.

They’re also known as keystroke loggers or keyboard capture. Smartphones, such as the iPhone and Android smartphones, can also be equipped with keylogger software.

Hardware and software keyloggers are the two forms of keyloggers. A cable, wire, USB port, or built-in device (like a chip) are all used to connect hardware keyloggers to the computer.

They may use a camera to record keystrokes or a USB gadget to transmit malware to the victim’s computer, capturing all data.

Keyboard Spy

Public WiFi

The WiFi hack is a very common attack on crypto wallets. In this method, scammers can interfere with your current session on the public network and find access to your crypto. 

Unfortunately, there are simple frauds that allow every unskilled hacker to hook into your network and steal your credentials.

Since most public WiFi networks are unencrypted, any potential invader will have easy access to them.

In a public place (e.g., a hotel), hackers install their own malicious WiFi routers with the intention of snooping on web traffic via a dubious access point.

Attackers may intercept data if users access insecure systems such as bank gateways or online crypto wallets. Hardware wallets offer more assurance against public network attacks.

So you need to be careful when connecting to public networks. It’s recommended to use apps like SPY24 to prevent your device from being hacked.

Malware

Cryptojacking cyberattacks are sometimes carried out using crypto-malware, which is a kind of malicious software or malware.

There are several ways that let this malware spread. Here are some of the most important ones:

  1. Crypto Ransomware: high-level risk
  2. Exfiltration (Leakware): high-level risk
  3. DDoS Ransomware: moderate-level risk
  4. Screen Lockers (Locker Ransomware): low-level risk
  5. Scareware: very low-level risk

Here are some well-known examples of crypto-malware attacks in the world:

  • Locky
  • WannaCry
  • Bad Rabbit
  • Ryuk
  • Shade/Troldesh
  • Jigsaw
  • CryptoLocker
  • Petya

Safeguarding Your Crypto Wallet

Now that you know different methods of hacking crypto wallets, it’s good to learn different methods of preventing attacks.

Safeguarding Your Crypto Wallet

Here are various means of protecting your crypto wallet from hackers:

Use a Non-Custodial Wallet

With non-custodial wallets, you always have complete custody and possession of your money. You have complete control over your private keys, which gives you full control over your funds. There’s no one there to stop you from doing whatever you want with your coins.

Here are some of the best non-custodial wallets:

  • Coinbase Wallet
  • MetaMask
  • COLDCARD Mk4
  • Trezor Model One
  • XDEFI Wallet
  • Billfodl

Avoid Unregulated Exchanges

Compliance and regulation are two essential factors for crypto exchange and, generally, the blockchain industry.

Many exchanges have tried to be regulated to increase the safety of their transactions. For example, Binance has increased its worldwide compliance team and advisory board over time, as well as actively assisting in the fight against fraud and ransomware to ensure regulatory compliance. So Binance is now a regulated exchange and digital service provider.

Use App-Based Two-Factor Authentication

App-based 2FA is compatible with any software that gets a key or a QR code to pair with your account. This way of authentication is based on an algorithm called “Time-based One-Time Password: or TOTP.

Here are some of the best 2FA apps:

  1. Microsoft Authenticator App
  2. 2FA Authenticator
  3. Authy
  4. Duo
  5. LastPass Authenticator
  6. Google Authenticator App

Avoid Reusing Email and Crypto Account Passwords

A malicious hacker may hack into an account by remembering passwords and using them to access other passwords belonging to the same user.

If accounts’ passwords are compromised, criminals can cause serious harm, such as stealing money or sensitive data from your workplace.

Conclusion

In this article, we surveyed different techniques for hacking crypto wallets and also the methods you can use to safeguard your wallet. Phishing Attacks and Fake Hardware Wallets are the most common ways of hacking a crypto wallet, so you need to be aware of them. It’s important to use non-custodial wallets and avoid unregulated exchanges.

FAQs

How to protect myself From cryptocurrency wallet hacks?

There are some other ways to protect yourself from being hacked. Here are some:
Avoid installing unusual browser extensions
Check your computer for any spy app
Separate the cryptocurrency divide and your personal laptop
Use updated apps
Don’t disclose any information on your wallet
Withdraw your crypto and store it in a wallet
Back up your seed word in a safe place
Use strong passwords for your apps
Check every URl and pay attention to “https”

How does blockchain security work?

The data structure in the crypto blockchain technology has been founded on the basis of consensus and decentralization principles. So blockchains have inherent security, making sure that each new date connects well to all blocks. This way, you can nearly be sure that it’s impossible to hack into the structure.

What is a 51% attack?

As a criterion, if you own more than 50% of the nodes on a blockchain network, you’ll earn the ability to control the network and alter the blockchain. 
So a 51% attack is when a cryptocurrency blockchain is owned by a group that can control the blockchain’s mining hash rate.

Are Blockchains Safe?

In blockchains, the transactions and other data are stored in multiple layers of data security in blockchains, which manage a large-scale record. Therefore, these technologies are often considered safe and secure.

Can Someone Steal My Cryptocurrency?

Unfortunately, yes. You have to store your cryptocurrency in your wallet. Therefore, hackers can access and steal your cryptocurrency since private keys are stored in applications and device wallets.

What Happens If Your Crypto Is Hacked?

There is hardly any way to retrieve your money if your crypto holdings are lost, hacked, or stolen.
You may not have access to reclaim your holdings if the exchange folds for any reason. Instead, many cryptocurrency exchanges allow users to store their funds in the United States. FDIC-insured partner banks’ dollar balances in linked accounts.

What’s the Safest Cold Wallet for Your Crypto Storage?

Trezor can be regarded as the most secure crypto wallet. Trezor’s simple-to-use touchscreen and insurance against forgotten passphrases are significant features.

What’s the Least Safe Place to Store Your Crypto?

The least safe place to store your cryptocurrency is on an exchange. So you’d better use a safe wallet to ensure the safety of your money.

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keleis andre

Bio: Keleis Andre About Me Hack Insight is a leading IT Security Magazine focused on hacking. Our experts prepare step-by-step tutorials, which include shellcode and information on how to defend against a hack and how to address vulnerabilities. The magazine dedicates its attention to issues surrounding Network Scanning, Malware, Cloud Security, DDoS, Web Hacking, Hacking ID/Passwords, Security Consulting, Reverse Engineering, WiFi Vulnerabilities, and much more. Hack Insight Magazine articles are written by specialists and experts who take theory and put it into practice. Covering important trends, providing relevant tips and tricks, and helping build technical skills remain critical. Our adventure started with our launch issue, which was published on 24.01.2004. We hope that every month the magazine’s coverage will become an increasing asset, resource, and place for insight into the evolving IT security world. Enjoy the hacking!

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