With more than 50 million people investing in cryptocurrency, hackers are exploiting this opportunity to steal billions of dollars. Last year, they managed to steal nearly $4 billion, and a report by the blockchain data platform ChainAlysis linked North Korean-related criminals to the thefts.
These criminals are using traditional hacking techniques such as social engineering attacks, where they impersonate people, and cloning websites to make them look like the real thing. This is often done through buying Google ads, which will lead to a phishing site.
With the pandemic leading to millions of investors buying Bitcoin, Ether, Dogecoin and other cryptocurrencies, hackers have been targeting digital wallets poorly protected. There are various attack vectors, such as the complete loss of private keys, which is very hard to recover. Even if a key gets leaked, the funds are often gone in a matter of minutes.
The solution is to not connect your digital wallet directly to the blockchain, and to not store your private key code on a password manager or other online device. Instead, keep it secure elsewhere in your home. Shield3 is a consumer protection tool that brings safety to crypto wallets and uses artificial intelligence to learn your behaviours to prevent scam sites.
It is important to note that cryptocurrency is an unregulated industry, and the federal government has yet to impose any controls. To ensure protection, the industry needs to self-regulate and come up with consumer protection standards, as well as make wallets more legible.
Investing in cryptocurrency is a very risky venture, so research thoroughly before making any decisions. A good place to start is the NerdWallet beginners guide to crypto, and find other third party resources to learn as much as possible. Understand that almost everyone who has been involved in cryptocurrency has lost money at some point.
