It cannot be denied that cybercriminals have been exploiting the crypto industry for years. With this market still somewhat in its early stages, many people are investing without fully understanding crypto. Malicious actors can prey on both unsecured platforms and naive investors to steal data and make money. So let’s discuss the most common crypto scams and attacks used today.
1. Cryptojacking
Today, the crypto mining industry is undoubtedly huge, with millions of miners around the world looking to make money by securing blockchain networks. But with mining so profitable, malicious actors have also turned their attention to it, looking for ways to capitalize on the mining industry without using their own specialized hardware.
This is where cryptojacking comes in. This cybercrime involves the unauthorized use of a victim’s mining hardware to harvest mining. Mining hardware can be quite expensive to both buy and run, and even mining crypto on a regular laptop can consume a lot of power and increase your electricity bill. This factor puts many people off the idea of crypto mining.
But by hijacking other people’s hardware, cryptojackers can make big bucks without having to use much of their own computing power. Cryptojacking software, which is what is usually used in this venture, can run on one’s device without drawing attention to itself, making it an even harder problem to notice. However, if you notice that your device is operating at a much slower speed than usual, cryptojacking software could be the culprit.
Since cryptojacking software is usually a form of malware, you should always ensure that 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 attack
In the crypto realm, the term “dust” is used to refer to small, insignificant amounts of crypto that may be left over after a transaction. These amounts are so small that they have no real economic value. However, dust can be maliciously exploited to invade the privacy of crypto wallet holders.
In crypto dust attacks, the malicious actor will conduct a dust transaction (ie send dust to) a number of wallet addresses. By doing this, the attacker does not lose financially, but can then reveal the identity of the wallet holders being targeted. This information can then be used to further target the individual, for example through a phishing scam.
Those with large amounts of crypto are usually targeted in dust attacks, as there is much more for the attacker to potentially gain.
3. Private key theft
When it comes to managing cryptocurrency, a private key is an incredibly valuable piece of data. This random string of letters and numbers can be used to authorize transactions with your crypto. Private keys are often held in crypto wallets, which can either 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. The likelihood is that if a cybercriminal got hold of your private key, they would empty your wallet as soon as possible.
To reduce the chances of private key theft, it is important that you choose a highly reputable and reliable wallet with solid security features. Hardware wallets are generally much safer than software wallets, but neither is impervious to hacks. Your best bet is to find a wallet with the highest levels of security, including PINs, backup phrases, biometric logins, and timed locks.
Additionally, you should never share your private key with anyone. Even if you trust someone, their failure to store the information you’ve provided could lead to theft of your assets. If possible, your private key should be made available to you and you only.
4. Phishing scams
Phishing is a favorite method of cybercriminals, be it for crypto scams or other online scams. Phishing is extremely versatile and can be used in a wide variety of scenarios. So it’s no surprise that cryptocriminals have chosen to use this technique to trick their victims.
Crypto phishing attacks are not all the same. Different cybercriminals are looking for different data, although the end goal is almost always financial gain.
Take the Coinbase phishing scam, for example. In this malicious campaign, cybercriminals emailed Coinbase users claiming they needed to provide information due to some sort of problem with their account, such as suspicious activity. Some Coinbase users interacted with these malicious emails, followed the requests and provided the required information.
In late 2021, over 6,000 Coinbase users were affected by a phishing campaign designed to steal sensitive data. In this wave of attacks, fraudsters posed as legitimate Coinbase employees and claimed that the target user’s account was locked. To remedy this, the user had to log in again and received a link to the login page in the email.
However, this link leads to a phishing site that can steal your login information as it is entered. With the credentials, the attackers were then able to log into the victim’s Coinbase account and access their funds.
There are many ways you can avoid falling for a phishing scam. Website link checking, anti-virus software, anti-spam filters and other tools can all be useful in protecting yourself from such threats. Additionally, if you receive an email from what appears to be a trusted party asking you to log into your account, do not click the link. Instead, go to your browser and access the login page via your search engine.
5. Scam ICOs
ICOs, or initial coin offerings, are common in the crypto industry. It is through this method that crypto-related startups can raise money by selling their own coins or tokens to interested investors. This is a solid way to raise funds, but can also be exploited by cybercriminals.
A scam ICO will probably never develop into a legitimate platform. Rather, they pose as potential companies looking to raise funds for their business and then hit the road once they’ve raised enough money. Depending on how savvy the cybercriminal is, fraudulent ICOs can be extremely convincing. But there are red flags you should look for when considering investing in an ICO.
First, all legitimate ICOs should have a whitepaper. This is basically a detailed plan for the project in question. A scam ICO will often not have a whitepaper at all or will use a copied version from a legitimate platform. They can also create their own fake whitepaper, but this is likely to be vague, sloppy, or simply not make sense.
It is also useful to familiarize yourself with the purported team behind an ICO. In the crypto space, it’s incredibly common for CEOs, developers, and founders to have some sort of online presence. This usually comes in the form of a Twitter or Instagram account. So if you can’t find any of the listed ICO team members online, they might not exist at all.
6. Rye Pull Cryptos
Rug pull cryptocurrencies are another worryingly widespread scam in the crypto industry. A rugpull crypto will often gather a lot of hype through marketing, making big claims or promising things that are a little too good to be true.
If a coin gets enough buzz, hordes of people will start investing. This will in turn increase the price of the coin. Once the scammer has caused enough of a price spike, they will sell all their holdings of the crypto, dump it and make a huge profit. This huge dump will cause the asset’s price to plummet, leaving investors empty-handed.
Again, you should always look for the whitepaper when considering investing in a new crypto. You should also check the online presence of the crypto creators and see how much of the total supply is held by them. Rug pull scammers will often hold back a large portion of the crypto supply so that they can sell huge amounts of it when the price has risen. Consider this another red flag.
Cryptocrime is now frighteningly widespread
Today, scams and attacks are nothing short of commonplace in the crypto industry. Cybercriminals have developed a variety of crypto-focused scams over the past decade or so, and are only getting smarter every year. If you own any form 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.
