The cryptocurrency space is one of the fastest growing financial sectors. With rapid growth, the interest in this sector has grown considerably among the general public or retail investor over time.
On one side, more and more individuals are now interested in the cryptocurrency market, and we can see that they have begun to appreciate the advantages of blockchain technology. At the same time, a variety of institutional investors have also changed their stances and are now more supportive of cryptocurrencies as a legitimate medium of exchange.
However, along with all this positive attention, the crypto world has also provided a lucrative opportunity to scammers, with phishing scams becoming quite common across different cryptocurrency exchanges. Individuals and institutional investor and Crypto firm have lost over billions of dollars due to various hacking and malicious phishing attacks in the cryptocurrency world.
In this article, we discuss what phishing Attacks are, How to Recognize and Avoid Crypto Scams? as well as the steps that you can take to prevent being affected by such attacks. Surely this article is going to be helpful for you to keep your money and investment safe in the crypto world.
Also Read: What Is Blockchain Trilemma
What is a Phishing Attack?
A phishing attack is a form of social engineering attack that aims to obtain sensitive information about your accounts, such as your private keys, username, passwords, and other details about your wallet or crypto exchange.
According to CheckPoint research, crypto phishing attacks that use Google Ads to position themselves on top of searches could steal over $500,000 in a matter of days. In another instance, a hacker stole $55 million from bZx – all by catching just one developer in the scam.
While phishing attacks try to obtain information about all your accounts, this article will focus on protecting your crypto assets from the phishing attacks.
Types of phishing Attacks
Users often fall victim to phishing attacks through a variety of methods designed by scammers, such as:
➢ The creation of a fake website.
➢ Sending instant messages or Emails with a fake link
➢ Social websites with fake links to exchanges and your wallet
➢ The use of email spoofing
➢ Chat with a fake support team
➢ Wi-fi phishing attacks designed to obtain information about your cryptocurrency wallet or your crypto exchange.
Few more types of phishing attacks are particularly common in the cryptocurrency space explain below
➢ Pharming attack
In this type of phishing attack, a victim is redirected to a fake website, even if they enter the correct URL.
This is usually done by infecting the DNS server, which is responsible for converting URLs into IP addresses, with malicious code. The code will then redirect victims to the attacker’s fake website when they try to visit a legitimate website.
Pharming attacks are particularly dangerous because they can be very difficult to spot. A victim may enter the correct URL for their bank’s website but still land on a fake website that looks identical to the real one.
➢ Spear phishing attack
Spear phishing is a targeted attack aimed at a specific individual or organization. Here, the scamer has some prior knowledge about their target and will use this to tailor the phishing email so it looks legitimate. For example, the attacker will spoof an email from a person or organization familiar to the victim. A malicious link disguised as an innocent one is then added.
➢ SMS phishing attack
SMS phishing, sometimes called smishing, uses text messages instead of emails. Smishing attackers send seemingly legitimate company text messages to their victims. When a victim clicks on the link within the SMS, they will be prompted to enter their login credentials, which the attacker uses to access their account.
➢ Whaling attack
A whaling attack is a specific type of spear phishing attack targeting high-profile individuals within an organization, such as CEOs. It’s particularly dangerous due to its potentially wider reach than a regular spear phishing attack. For instance, if a CEO falls for it and clicks on a malicious link, the attacker could gain access to the company’s entire network.
Also Read: What Is Crypto Fear and Greed Index
➢ Clone phishing attack
This attack happens when the scamer creates a replica of a legitimate email as official Crypto firm that has been sent to the target in the past.
The phisher replaces the original attachment or link with a malicious one and sends it to the victim. Since the email looks identical to one previously received by the victim, they are more likely to click on the link out of habit or familiarity.
➢ Evil twin attack
An evil twin phishing attack targets public Wi-Fi networks. Here’s how attackers do it: They will set up a fake Wi-Fi network using the same name as a legitimate network. When victims connect to the network, they will be prompted to enter their login credentials, which the phishers can then use to gain access to their accounts.
➢ DNS hijacking
Domain Name System (DNS) hijacking redirects victims to a fake website by changing the DNS entries for a legitimate website. To execute the attack, a phisher replaces the DNS entries, so they point to a different IP address. When victims try to visit the legitimate website, they will be redirected to the attacker’s fake website instead.
The attack is then carried out by loading malware on people’s computers, taking control of routers, or interfering with DNS communications.
➢ Phishing bots
Phishing bots are computer programs that automate phishing attacks. They can be used to send out mass phishing emails, create fake websites, and host those sites on servers. Such bots could also automatically collect victims’ login credentials and other sensitive information.
These programs are often applied in conjunction with other types of attacks, such as denial-of-service attacks and spamming.
➢ Fake browser extensions
These extensions are malicious plugins designed to resemble legitimate ones. They are often used to steal sensitive information, such as login credentials and credit card numbers. In addition, they can redirect victims to fake websites, inject malware into their computers, or display unwanted advertisements.
Fake browser extensions are usually distributed through phishing emails or malicious websites. When installed, they can be difficult to remove. The extensions are essentially phishing for private information such as mnemonic phrases, private keys, and Keystore files.
➢ Crypto-malware attack
A crypto-malware attack is a type of malware that encrypts the victim’s files and demands a ransom to decrypt them. It can be spread through phishing emails, malicious websites or fake browser extensions.
Once installed on the victim’s computer, the malware will encrypt their files and display the ransom message on their screen.
➢ Voice phishing attack
Also known as vishing, this type of phishing uses voice calls or voicemails instead of emails. It usually happens on voice-based media, such as voice-over IP or conventional residential phone service. In a voice phishing attack, the attacker spoofs the caller ID to make it appear as if they are calling from a legitimate organization, such as a bank. Vishing fraudsters frequently employ speech synthesis software to leave voicemails warning potential victims of fraudulent activity in their bank or credit accounts.
Few Crypto Phishing Attacks occurred before
There were 290 recorded attacks during the second quarter, up 170% from 106 in the first quarter, according to a Web3 Security Q2 2022 report by CertiK, a blockchain and DeFi security-focused platform backed by Goldman Sachs and others.
A few months ago crypto indexing sites CoinGecko and Crypto Explorer Etherscan were victims of phishing attacks. Crypto data websites Etherscan, CoinGecko reported incidents of a malicious pop-up prompting users to connect their MetaMask wallets. The phishing attack appears to come from a domain displaying the Bored Ape Yacht Club logo. As of press time, the site tied to the domain appeared to be taken down.
“We are investigating the root cause of this attack to fix it as soon as possible,” CoinGecko founder Bobby Ong told CoinDesk in a Telegram message.
“The situation is most likely caused by a malicious ad script by Coinzilla, a crypto ad network – we have disabled it now,” said Ong. “We are monitoring the situation further.”
In a tweet, Etherscan urged users to “not confirm any transactions” that popped up on its website.
Security Alert: If you are on the CoinGecko website and you are being prompted by your Metamask to connect to this site, this is a SCAM. Don't connect it. We are investigating the root cause of this issue. pic.twitter.com/7vPfTAjtiU
— CoinGecko (@coingecko) May 13, 2022
🚨 We’ve received reports of phishing popups via a 3rd party integration and are currently investigating.
Please be careful not to confirm any transactions that pop up on the website.
— Etherscan (@etherscan) May 13, 2022
These two are examples of malicious phishing attacks. Also, there is no count of how many crypto exchange, wallet, crypto related websites are facing such malicious phishing attacks every day and the number is increasing day by day.
How to Recognize Phishing Attacks and Avoid Crypto Scams?
Types of Phishing Attacks and How Phishing Attacks Are Performed You can get an idea of what types of phishing attacks are from the above discussion. From the description above, you know how to identify a phishing attack, now you know how to protect yourself from it. With scamers becoming smarter and more advanced with how they carry out such attacks, it is important for you to know exactly how you can prevent yourself from becoming a target. Some tips and advice that you must definitely follow while accessing your cryptocurrency online have been discussed below.
A. Identify and Avoid Fake Ads in Search Engine
When typing a crypto Exchange or wallet website into a search engine (i.e., Google) or heading to any link sent to you from an external source or website, make sure to double-check if the URL is legitimate. Exercise extreme caution when clicking on Google Ads, and make sure that you check the URL is legitimate as phishing sites have been known to place fake advertisements.
B. Official Media Verification
Whenever you get contacted by social media accounts or emails providing you with a link that you should use to login, you can verify whether this actually belongs to official web address or is simply a scam link. Verify their address from the specific exchange or wallet’s verified social media platform to know if that web address is an official website or not.
C. Enabling Two-Factor Authentication
At the same time, another important measure that you should take is to enable two-factor authentication on your account, so as to add another layer of security to protect your data and your digital assets.
This will ensure that no one can access your account or withdraw funds from your crypto exchange without entering a code sent to your phone or any other device of your choosing. Doing this will require the phishing hackers to have access to your phone or Authenticator app even if they somehow gain access to your key and other data.
Also Read: Sui Blockchain Explained – what is sui?
D. Bookmark Official Site
Every time you log into your account, we recommend double-checking that you are visiting the correct crypto website. You should bookmark it right away. Check the URL address. It should start with “https://.”
E. Create Strong Passwords
One of the most fundamental ways in which you can keep your crypto wallet or exchange safe from malicious hackers is to create and use strong passwords for all your crypto-related accounts and wallets. This will prevent hackers from using brute force attacks to try and guess your password so that they can steal your money. Whenever you create an account on a cryptocurrency exchange (or a wallet of any kind) in order to trade, make sure that your password and code are not something that can be easily guessed.
A recent study shows that more than 50% of users recycle their passwords across different accounts, which is a weak security measure stand makes it easier for scammers to gain access to your details, and subsequently your wallet.
A strong and secure password or code usually has over 10 characters, with a combination of letters, numbers, and special symbols. Most password generators on the Internet can easily provide you with such passwords that will keep your data secure and ensure a high level of security on your wallet address.
F. Site Certificate
You can also check the Site Certificate to see whether a website is safe to visit. If you are using Google Chrome, you can click on the security status in the left part of the web address (a lock indicates that the website is secure). If you are using a different browser, please look at how to view the Site Certificate in your browser’s settings.
G. Use a Password Manager
When you decide to use a variety of complex private keys and passwords to keep your cryptocurrency accounts secure, it might not be easy to remember them all. This is where software such as password managers come into play.
By using a password manager, you can ensure that you never have to remember the credentials for your wallet, while still maintaining a high level of security. This will prevent malicious scammers from being able to steal your cryptocurrencies.
Using Autofill to Prevent Phishing
An additional advantage is that since most password managers have Autofill options to enter your credentials whenever you wish to sign in, they can help you spot fake websites with a page that may have been designed to look like your crypto exchange. Therefore, since your manager will not Autofill your credentials on such sites, you could spot such schemes and be safe.
H. Verify Everything
Lastly, an important way to ensure that you do not fall victim to such scams is to simply question everything. Here’s what you can pay attention to:
Suspicious Emails, As an example, if you get a mail telling you that your account has been locked, make sure that it is from the official email address of your crypto exchange.
Similarly, before clicking on any links to a page that you might receive via the site or through social media, make sure that they are legitimate.
Don’t Provide Your Code and Login Details. The same also applies to providing your login details on any website. Usually, people who fall victim to phishing do not check to see if the website to which they provide their data is legitimate or not, which leads to them losing money.
Additionally, make sure to use a secure and trustworthy email service provider, and if you use a self-built email server, be sure to enable DKIM, DMARC and SPF.
Can Phishing be Completely Stopped?
A lot of research has been conducted into whether a digital company can actually be secure to the point wherein phishing is impossible – however, the overall consensus is that phishing attacks cannot be completely stopped, but rather prevented by users themselves.
Therefore, it is up to you as the user to ensure that your crypto wallets are secure and that you are safe from scams.
Why Is Complete Phishing protection Impossible?
There are several reasons why making a crypto exchange, crypto site or a crypto wallet fully protected from phishing is impossible, and the largest among these is that the form of attack used is constantly changing.
For example, as email providers sought to prevent users from receiving scam emails by creating a good spam blocker, attackers just improved the quality of their emails to bypass such spam filters.
Some attacks can bypass security measures and appear as completely legitimate. They also target users who are more likely to click on unauthorized domain links on the web, thereby adding to the risk.
What this basically means is that the onus to reduce phishing lies on the user of cryptocurrency exchanges, and that they should focus on improving their personal security as an optimal way of preventing such security breaches.
While exchanges can boost their security measures to ensure that the data of users is protected and no breaches occur, phishing is more likely to target users than it is to target digital companies, since the likelihood of them falling for the scam is much higher.
Anti-Phishing Tips for Avoid crypto scam
Here are some tips for when you receive communication from your exchange, whether through email or through their social media:
➢ Check whether you have been contacted by the official account or email.
➢ Make sure that the URL for the page you are led to is exactly the same as your exchange’s, and not something similar.
➢ Ensure that the communication style and language are consistent with previous messages you may have received from the company and that it does not resemble messages from scammers and attackers.
➢ Check whether your browser remembers visiting this website in the past. If you are led to your exchange’s web page, then your browser will recognize the company.
➢ Do not send any cryptocurrencies to users you do not recognize. No exchange will ever contact you to say that your account has been blocked and can be fixed in exchange for money, if you get an email like this, It is probably sent by malicious attackers who wish to steal your funds by accessing your wallets.
➢ Install good antivirus software on your device to ensure that you can easily detect any email which contains malware or leads to sites that could put your PC at risk by introducing malware.
Phishing can easily be prevented through a variety of security steps being taken by You, such as the use of stronger passwords, 2-factor authentication, a web manager, and a healthy dose of skepticism whenever asked to provide details through a suspicious domain address.
Research shows that while phishing cannot be completely prevented by either the user or the exchange, a variety of strong security measures can ensure that you reduce their chances as much as possible, keeping yourself and your cryptocurrencies safe in this digital world. In short, you need to be aware and updated about all types of cryptocurrency phishing and have a proper understanding of security.