Crypto sentiments are running higher, and more people are busy on-ramping and off-ramping their assets. While it might seem like only the wealthy are targeted by cybercriminals, the truth is, anyone can be a victim of a crypto hack, including you! 

This article tackles some common cryptocurrency scams and ways that you can best protect your crypto assets. It is important to remain aware while navigating technology within the Web3 space. You can read more about how to protect yourself below.

Protect your crypto assets: Educate yourself on the most common scams

Social engineering

Social engineering is a cyberattack where hackers manipulate you into revealing sensitive information or performing actions by posing as trusted individuals like colleagues, bank representatives, or IT personnel. These attacks, including baiting and phishing, aim to steal your personal data like login credentials, credit card numbers, or financial information. Any sensitive data points can potentially compromise your exchange login credentials and wallets. These data points give your hacker the data they need to drain your funds. 

Baiting and Phishing

In these types of social engineering attacks, you might receive a phone call from an “exchange representative”. You may also receive an email with an attachment. You might engage with the representative who tells you your password has been compromised on their website, providing them with your sensitive information. Similarly, you might click on what looks like an official email attachment.

It is highly unlikely that an exchange will contact you directly with “urgent” information. Additionally, clicking on unknown links can expose your device to malware. Keylogging is one form of malware that can track your keystrokes and send them to a hacker. Pop-up ads can also contain malware, so it is important to obtain an ad blocker for your device. Furthermore, if you are going to download an app online or purchase a cold-storage wallet, it is best to always go to the company directly. Even popular sites like the Apple Store could have fake apps impersonating legitimate companies. There have also been cases of theft reported from tainted hardware wallets that were shipped directly to consumers. 

Helpful tips: 

The following tips can help you protect your crypto assets:

• Be wary of anyone claiming to call you with an “urgent” matter. Hang up, log into your exchange or wallet, and take control by making the first contact to the company.
• Review the origins of any emails that may look like official communications from a company you have done business with. If the sender’s name looks odd, there are grammar issues, or you just want to be cautious, contact the customer service department of the business directly for more information. 
• Secure your devices with an antivirus software that also includes an ad blocker.
• Double check any applications before downloading them from sites like the Apple Store.
• Order your cold-storage wallets and other crypto products directly from the vendor’s website. 

SIM swapping

Another favorite method for criminals to use to steal your assets is SIM swapping. SIM swap fraud is a scam that targets a loophole in two-factor authentication (2FA) that relies on SMS or voice call verification. In this scam, attackers trick your mobile carrier into transferring your phone number to a SIM card they control. With control of your number, they can also intercept verification codes sent via SMS or voice call, granting them access to your online accounts. 

Popular crypto sleuth, ZachXBT, gathered data highlighting that 54 SIM swaps had occurred to individuals in the Web3 community in just four months of 2023. 

SIM Swapping — the government is getting involved

Moreover, SIM swapping has become so popular that a coalition of consumer advocacy groups are urging the FCC to hold phone carriers liable for failing to prevent SIM swap fraud. Consumer advocacy groups expressed their dissatisfaction with the current level of enforcement actions, according to a National Consumer Law Center press release issued on Feb 13. The most compelling point made is that carriers need stronger incentives to invest in better security measures.

Holding carriers financially responsible for losses due to SIM swap attacks would encourage them to implement effective safeguards, the advocates argue. Additionally, they urge the FCC to ban clauses that prevent consumers from suing carriers in court after falling victim to such fraud. Notably, advocates believe that consumers deserve both protection and the ability to seek compensation when carriers fail to secure their networks.

Helpful Tips 

The following tips can help you protect your crypto assets. Notably, we gathered a few of these tips from on-chain analyst ZachXBT, a respected figure in our community.

• Don’t use SMS 2FA, but instead use a security key, like YubiKey, for example. YubiKey adds an extra layer of protection to your online accounts by making it harder for attackers to steal your login information. Unlike passwords or SMS codes, which can be stolen through phishing attacks, a YubiKey requires physical possession to authenticate access. This means that even if a hacker manages to steal your password, they still won’t be able to log in to your accounts without the physical YubiKey device.
• If you get the “blue checkmark” verification on Twitter, remove your phone number once you are approved and the checkmark is securely on your profile.
• If you have been SIM swapped through Twitter, make a support ticket with your email address.
• Once your Twitter account has been brought back online, double check within your settings if the scammer delegated access to another account. Remove their access immediately. 
• Explore secure mobile services, like Efani, which deal with high-net worth individuals and offer up to 5 million dollars of insurance coverage if you were SIM swapped. 

Bottom Line

While cryptocurrency adoption is soaring, it’s crucial to remember that anyone can be a target for cyberattacks. This article has equipped you with knowledge about common scams and actionable tips to protect your crypto assets. Stay vigilant, utilize strong security measures, and adopt alternative authentication methods to stay safe. Remember, education is your strongest defense against crypto scams.

Do you have other tips on how you protect your crypto assets? Let us know in the comments! 

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