How can you keep your crypto safe? Securing your wallets and private keys remains a highly important topic in the Web3 sector, as criminals continue to scam people out of their crypto assets.
Chainalysis reports show that in 2022 alone, the revenue gained by fraudsters in crypto stood at about US$6 billion (AU$9.1 billion).
Seeing as malicious actors often exploit the lack of awareness among users, learning the proper ways of downloading and handling crypto apps is crucial. That’s the only straightforward way to evade potential pitfalls and safeguard your financial resources.
Defensive Strategies in the Crypto Wild West
There are several pieces of advice that can be put into practice here, the very first of which is not to be hasty. When you are planning to engage in crypto-related operations, do not skip on conducting careful research on whatever app you intend to download.
Check the app’s history, user reviews, the team behind it, as well as their backgrounds. This is the best way to make sure that the app comes from a reputable source and is safe to install. Furthermore, only download applications from official websites or app stores to avoid counterfeit applications, which are a common method among fraudsters.
As far as the security of personal information goes, never use the same password for different applications. In case of a security breach, one compromised account would give unauthorised access to all other accounts if they have the same password.
One other thing to note here is that you should never keep more funds in crypto apps than you are prepared to risk. Think carefully if you can take the loss if something goes wrong.
Also take care to keep the app updated to ensure you have the latest security patches and employ two-factor authentication (2FA) when possible in order to minimise risks.
Avoid using public Wi-Fi when accessing crypto applications due to potential security vulnerabilities. In the ideal scenario, you want to have a device that stays offline and turned off most of the time, except for the times when you need to use it for managing your funds.
You may also want to consider using multi-signature wallets that require more than one key to authorise any transactions.
Responding to Crypto Theft: From Panic to Action
If you noticed that despite your efforts, funds have been stolen from your wallet after all, there are several things that you may wish to attempt.
First of all, do not panic and check the app and the official website of the wallet for any security notices or general updates from the team. With MetaMask, for example, tokens sometimes might not show and you need to add their ticker to the wallet in order for them to become visible.
Secondly, check your wallet through the Etherscan token tracker and see if your coins are visible there or if they were moved. Look for any unauthorised transactions, and if it’s clearly a theft, report it to the relevant cybercrime authorities along with all relevant details.
Before trying to track down stolen assets, make sure to update and reinforce your existing security. Change all passwords and security information that may have been compromised and immediately move whatever funds you have remaining to another wallet. A hardware wallet which keeps private keys offline should be your preference here.
Tracing stolen funds
As for tracing the already stolen funds, cybersecurity firms provide services that specialise in tracking digital assets. Remember that most blockchains are public and transparent, which can be advantageous in tracing transactions. Use blockchain explorers and analytics tools to follow the trail of stolen assets.
You should also notify law enforcement in your region, as they may use specialised tools and collaborate with crypto exchanges. If the stolen funds were moved to a centralised exchange and are being laundered through it, the police can ask the exchange to suspend operations for wallets under suspicion and provide all available data on their owners. This considerably raises the chances of tracking down the attacker and retrieving the assets they ran off with.
The Rise of Crypto Whistleblowers
Anonymous tips from various whistleblowers have played a major role in combating crypto fraud in 2023. This surge may indicate an increased awareness and concern regarding fraud and security vulnerabilities within the crypto space, leading to more individuals reporting suspicious activities. This can keep your crypto safe.
Whistleblowers can play a crucial role in uncovering schemes that might be difficult for regulators to detect, and reports from them can act as a catalyst for regulatory investigations and actions. They can provide valuable insights as they usually know this field inside out and constantly monitor for new protocols/platforms/tokens.
The anonymity of these tips, however, may reflect a fear of retaliation or an overarching lack of trust in the system, which highlights the need for better protective measures for those reporting crimes.