Crypto-Crime On The Rise

Cryptocurrencies have generated a lot of buzz online in recent years. Many people believe that cryptocurrencies have the potential to change the world forever if they become widely adopted. However, the crypto craze has not come without its consequences. While many would-be investors are looking to ride the crypto wave to prosperity, cyber criminals also see this as an opportunity for them to cash in on a growing market. Crypto-Crime, as it’s been coined, has led to billions of dollars being stolen each year with a record high of 14 billion dollars in 2021.

Why Criminals Are Interested In Crypto

Many of the benefits of cryptocurrencies touted by crypto enthusiasts are the same reasons criminals find cryptocurrencies appealing. Some of those include:

• Anonymity – Maybe the most attractive aspect of cryptocurrency transactions to criminals is that the participants are anonymous. While transactions and wallet addresses are publicly recorded, neither are publicly linked to any individual’s identity
• Fast Global Transfers – Transactions can be completed in minutes in comparison to other methods which can take 3-5 days or 24 hours for wire transfers. Cryptocurrency is also borderless meaning you can transfer it anywhere in the world.
• Easy Access – Cryptocurrencies are accessible to everyone with an internet connection. There is no need to go through a central authority like a bank to set up a crypto wallet. No background or credit check needed to get setup and begin making transfers.

These features of crypto make it the currency of choice for cyber criminals to use on the dark web. Naturally, the rapidly rising popularity of cryptocurrencies puts investors directly in the sights of criminals looking to steal more crypto for themselves. One such example are fake crypto investment apps created to fool investors. The criminals use social engineering to trick people into downloading their apps and depositing their crypto, which they will never be able to withdraw.

Another way criminals can steal crypto is by exploiting blockchain bridges. A blockchain bridge is software that links two blockchains to allow investors to use tokens from one blockchain on another. For example, the bridge allows you to use Bitcoin on the Ethereum blockchain instead of having to buy Ethereum. Unfortunately, bridges can be exploited just like any other software when there are vulnerabilities in the code. One notable attack happened in February, where attackers exploited the Wormhole bridge to steal $321 million in crypto.

Criminals also utilize ransomware to extort crypto from people. We have a detailed blog about ransomware here. Ransomware is a type of malware that prevents or blocks you from accessing your computer data or system, usually through encryption or a lock screen. In order to regain access, the victim must pay a ransom in crypto. In 2021, the average cost of ransomware attacks was $1.4 million.

How To Protect Your Crypto

General safe practices online like those discussed here, will help keep your cryptocurrency safe from criminals. In addition to those tips you should:

• Only use trusted apps and websites for transactions and deposits. Do not deposit your crypto into any investment apps without triple checking that it is safe to do so.
• Do not reveal any sensitive information, such as seed words, passwords, or 2FA codes to anyone.
• Use a hardware wallet to securely store your crypto offline.
• Store your private key somewhere safe offline. If you lose this, you could lose access to your crypto.
• Don’t publicly gloat about your crypto holdings. You will be putting a target on your back.
• Use a password manager. This will help you create strong passwords and keep track of them.