Cryptocurrency users are all too familiar with online hacks, as Mark Cuban’s case of almost a million dollars leaving his digital wallet demonstrates. But there are three simple guidelines that can help bolster the security of your funds.
The Lazarus Group, a North Korean state-sponsored hacking group, is known for their sophisticated cyberattacks and cybercriminal activities, including the WannaCry ransomware attack. It encrypted files on infected computers and demanded a ransom payment in Bitcoin (BTC). The Lazarus Group has also been linked to several high-profile cryptocurrency hacks, such as the Yapizon (later rebranded to Youbit) hack in April 2017, which resulted in the theft of 3,831 Bitcoin (worth over $4.5 million at the time) and the Axie Infinity bridge Ronin hack which caused a loss of $620 million.
The Federal Bureau of Investigation (FBI) also accused the group of being behind the Alphapo, CoinsPaid and Atomic Wallet hacks in 2022, with losses of over $200 million. Most recently, the FBI attributed the Lazarus Group to a $41 million hack of the crypto gambling site Stake and the $55 million hack of the crypto exchange CoinEx.
Contrary to what is often depicted in movies, most hacks are not the result of physical access to devices or brute forcing passwords, but rather of social engineering and exploiting human error. Attackers may pose as customer support representatives or other trusted figures and seduce victims into giving away personal information. Phishing attacks involve sending deceptive emails or messages to trick recipients into taking malicious actions, while baiting attacks offer something enticing to the victim (e.g. free software or a job opportunity).
Fortunately, there are three steps crypto investors can take to prevent hacks and exploits: (1) use hardware wallets for long-term storage of your crypto assets, (2) enable Two-Factor Authentication (2FA) on all your crypto exchange and wallet accounts, and (3) be extremely cautious when clicking on links on emails and social media.
By following these guidelines, you can reduce the chances of your funds being stolen and help protect your cryptocurrency investments.