There’s no denying that cybercriminals have been capitalizing on the crypto industry for years. With this market still somewhat in its early stages, a lot of people invest without understanding crypto fully. Malicious actors can prey on both unsecured 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.
1. Cryptojacking
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 also turned their focus 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 reap mining rewards. Mining hardware can be pretty pricey to both purchase and operate, and even mining crypto on a regular laptop can consume a lot of power and bump up your electricity bill. This factor puts a lot of people off the idea of crypto mining.
But by hijacking someone else’s hardware, cryptojackers stand to make a hefty profit without having to expend a lot of their own computing power. Cryptojacking software, which is what is commonly used in this venture, can run on one’s device without drawing any attention to itself, making it an even trickier problem to notice. However, if you notice that your device is operating at a much slower speed than usual, cryptojacking software may be the culprit.
Because 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 kinds of malware.
2. Dust Attacks
In the crypto realm, the term “dust” is used to refer to tiny, negligible amounts of crypto that can be left over after a transaction. These amounts are so small that they have no real financial value. However, dust can be leveraged maliciously to invade the privacy of crypto wallet holders.
In crypto dust attacks, the malicious actor will conduct a dust transaction (i.e sending dust to) a number of wallet addresses. By doing this, the attacker doesn’t lose out financially, but can then uncover the identity of the wallet holders targeted. This information can then be used to further target the individual, say through a phishing scam.
Those with large amounts of crypto are usually targeted in dust attacks, as there’s a lot 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 line 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 safe storage option.
With your private key, a threat actor essentially has access to your crypto. The likelihood is that, if a cybercriminal was to get a hold of your private key, they would drain your wallet as soon as possible.
To lower the chances of private key theft, it’s paramount that you choose a highly reputable and trustworthy wallet with solid security features. Hardware wallets are generally much safer than software wallets, but neither is impervious to hacks. The best you can do is find a wallet with the highest levels of security, including PINs, backup seed phrases, biometric logins, and timed lockouts.
Additionally, you should never share your private key with anyone. Even if you trust an individual, their failure to safely store the information you’ve provided could result in the theft of your assets. If possible, your private key should only be made accessible to you and you only.
4. Phishing Scams
Phishing is a favorite method of cybercriminals, be it for crypto scams or other cyber swindles. Phishing is hugely versatile and can be used in a wide variety of scenarios. So it’s no surprise that crypto criminals have opted to use this technique to scam their victims.
Crypto phishing attacks are not all one and the same. Different cybercriminals are looking for different data, though the end goal is almost always financial gain.
Take the Coinbase phishing scam, for example. In this malicious campaign, cybercriminals would email Coinbase users claiming that they needed to provide information due to some sort of issue with their account, such as suspicious activity. Some Coinbase users interacted with these malicious emails, complying with the requests and providing the information required.
In late 2021, over 6,000 Coinbase users were affected by a phishing campaign designed to steal sensitive data. In this wave of attacks, scammers impersonated legitimate Coinbase staff and claimed that the target user’s account had been locked. To remedy this, the user needed to log back in and was provided a link to the login page within the email.
However, this link lead to a phishing site that could steal the login credentials when entered. With the login information, the attackers could then log into the victim’s Coinbase account and access their funds.
There are numerous ways through which you can avoid falling for a phishing scam. Link-checking websites, antivirus software, anti-spam filters, and other tools can all be helpful in protecting yourself from such threats. Additionally, if you receive an email from what looks to be a trusted party asking you to log into your account, don’t click on the link provided. Instead, head to your browser and access the login page via your search engine.
5. Scam ICOs
ICOs, or initial coin offerings, are commonplace in the crypto industry. It’s through this method that crypto-related startup companies can raise funds by selling their own coins or tokens to interested investors. This is a solid way to amass funds, but can also be exploited by cybercriminals.
A scam ICO will likely never evolve 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 accumulated enough money. Depending on how savvy the cybercriminal is, scam ICOs can be extremely convincing. But there are red flags that you should look out for when you consider investing in an ICO.
Firstly, all legitimate ICOs should have a whitepaper. This is basically a detailed plan of the project in question. A scam ICO often won’t have a whitepaper at all or will use a copied version from a legitimate platform. They can also create their own phony whitepaper, but this will likely be vague, sloppy, or will simply make no sense.
It’s also useful to familiarize yourself with the alleged team behind an ICO. In the crypto space, it’s 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 listed ICO team members online, they may just not exist at all.
6. Rug Pull Cryptos
Rug pull cryptocurrencies are another worryingly prevalent scam in the crypto industry. A rug pull crypto will often amass a lot of hype through marketing, making big claims or promising things that are somewhat too good to be true.
If a coin receives enough of a buzz, hordes of people will begin to invest. This, in turn, will increase the price of the coin. Once the scammer has caused enough of a price rise, they will sell all their holdings of the crypto, dumping it and making a huge profit. This huge dump will cause the asset’s price to plummet, leaving investors empty-handed.
Again, you should always check for the whitepaper when considering investing in a new crypto. You should also check the online presence of the crypto’s creators and look into how much of the overall supply is being held by them. Rug pull scammers will often hold a large proportion of the crypto supply back so that they can sell huge amounts of it once the price has increased. Consider this another red flag.
Crypto Crime Is Now Frighteningly Rife
Today, scams and attacks are nothing short of commonplace in the crypto industry. Cybercriminals have developed numerous crypto-focused swindles over the past decade or so, and are only becoming savvier by the year. If you own any kind of crypto, or you’re considering investing, make sure you’re aware of the most common crypto attacks out there to lower your chances of getting conned.
