Most Common Types Of Crypto Hacks In 2024

Hacks and scams have posed significant barriers to the long-term sustainability and mainstream adoption of crypto. The security vulnerabilities within the crypto ecosystem have led to substantial financial losses and eroded user trust.

High-profile incidents, such as the 2014 Mt. Gox hack and the 2016 Bitfinex breach, underscore the severe impact of cyberattacks. Mt. Gox, once the world’s largest Bitcoin exchange, collapsed after losing 850,000 BTC, leading to its bankruptcy. Similarly, Bitfinex’s hack resulted in the theft of 120,000 BTC, causing temporary suspension and a drastic restructuring of the platform.

So, unfortunately, crypto hacks are not stopping anytime soon, but with the right information, we can become prepared and resilient against these threats.

Key takeaways

• Crypto hacks increased in 2024, with cybercriminals stealing $1.38billion in the first half of the year, more than double from the previous year.
• Common types of crypto hacks include phishing attacks, malware and ransomware, exchange hacks, and 51% attacks.
• Rug pull scams are also a significant threat, where developers create fraudulent projects and disappear with investors’ funds.
• Most targeted cryptocurrencies for hacks are Ethereum, Bitcoin, Binance Coin, Solana, Polygon, and Toncoin.
• Detection of compromised wallets involves monitoring for unexpected transactions, changes in account settings, unusual login locations, alerts from security software, and performance issues.
• Security practices include using hardware wallets, enabling two-factor authentication (2FA), using strong passwords, keeping software updated, verifying recipient addresses, being wary of phishing scams, using secure networks, regularly backing up private keys, monitoring accounts, and continuous education on security threats.

What are some common types of crypto hacks?

Phishing attacks

Phishing attacks are one of the most prevalent forms of crypto hacking. Cybercriminals create fake websites or send fraudulent emails mimicking legitimate cryptocurrency exchanges or wallet providers. Unsuspecting users are tricked into providing their private keys or login credentials, allowing hackers to access and steal their digital assets. These attacks often exploit social engineering techniques to create a sense of urgency or authenticity.

Malware and ransomware

Malware and ransomware attacks pose a significant threat to cryptocurrency holders. Malware can be delivered through infected software downloads, malicious websites, or email attachments. Once installed, the malware can monitor keystrokes, capture login credentials, or even take control of the user’s device. Ransomware, on the other hand, encrypts the victim’s files and demands payment in cryptocurrency to restore access. These attacks can lead to substantial financial losses and operational disruptions.

Exchange hacks

Cryptocurrency exchanges are prime targets for cybercriminals due to the large volume of digital assets they hold. Exchange hacks involve breaching the security systems of these platforms to gain unauthorized access to users’ funds. Hackers may exploit vulnerabilities in the exchange’s software, employ social engineering tactics, or launch distributed denial-of-service (DDoS) attacks to distract security teams while they carry out their heist. High-profile exchange hacks have resulted in millions of dollars’ worth of cryptocurrency being stolen.

51% attacks

A 51% attack occurs when a single entity or group gains control of more than 50% of the computational power in a blockchain network. This control allows the attackers to manipulate the blockchain by double-spending coins, halting transactions, or reversing completed transactions. Smaller and less secure blockchain networks are particularly vulnerable to 51% attacks. These attacks undermine the trust and reliability of the affected cryptocurrency, leading to a loss of confidence among users and investors.

Rug pull scams

Rug pull scams, though not technically hacks, are a significant threat in the cryptocurrency world. In a rug pull scam, developers create a new cryptocurrency or DeFi project and attract investors with promises of high returns. Once a substantial amount of investment is accumulated, the developers abruptly withdraw all funds and disappear, leaving investors with worthless tokens. This type of scam exploits the trust of investors and the decentralized nature of the crypto market, highlighting the importance of due diligence and skepticism in the rapidly evolving crypto space.

State of crypto hacks in 2024

In 2024, the landscape of cryptocurrency hacks and scams has seen significant developments. According to TRM Labs, cybercriminals stole $1.38bn worth of crypto assets from January to June 2024, which is more than double the amount stolen during the same period in 2023.

This increase is attributed to a small number of large-scale attacks and rising token prices, with private key and seed phrase compromises remaining prominent attack vectors. The largest single attack in 2024 involved Tokyo-based DMM Bitcoin, which lost over $300m in Bitcoin due to suspected stolen private keys.

A report by Immunefi highlights a 23% decline in losses from hacking and scams in Q1 2024 compared to the same period in 2023, amounting to $336.3m. DeFi platforms remain major targets, accounting for all identified exploits in Q1. Notably, the largest attack in Q1 involved the cross-chain bridge protocol Orbit Bridge, resulting in a $81.7m loss.

PlayDapp, a prominent gaming and NFT platform, faced two significant security breaches in February 2024, leading to a total loss of approximately $290m. The breaches were caused by vulnerabilities in their smart contracts, which allowed unauthorized minting of PLA tokens.

Overall, in 2024, the crypto space continues to grapple with various security challenges, emphasizing the need for robust security measures and ongoing vigilance to protect digital assets from evolving threats.

How do hackers gain unauthorized access to crypto wallets?

Social engineering and phishing

Phishing is a common technique where hackers trick users into providing their private keys or wallet credentials. They often create fake websites or send emails mimicking legitimate cryptocurrency services. Once the user enters their sensitive information, hackers capture it and gain access to the wallet. This method leverages social engineering tactics to create a sense of urgency or legitimacy, making users more likely to fall for the scam.

Beyond phishing, other social engineering tactics include impersonating support staff or using social media to build trust with the victim. Once trust is established, the hacker convinces the victim to reveal sensitive information or perform actions that compromise their wallet security. This method relies heavily on psychological manipulation rather than technical prowess.

Malware and keyloggers

Hackers also use malware to infiltrate users’ devices. This malicious software can be delivered via infected downloads, compromised websites, or email attachments. Once installed, malware can monitor keystrokes (keyloggers), capture login details, or even provide remote access to the hacker. This method allows attackers to directly observe and record the private keys or passwords as the user types them.

SIM swapping

SIM swapping is another method where hackers take control of a victim’s phone number by tricking the telecom provider into transferring the number to a SIM card controlled by the hacker. With access to the phone number, hackers can bypass two-factor authentication used to protect the crypto wallet. This allows them to reset passwords and gain access to the wallet without needing the private key directly.

Exploiting vulnerabilities

Hackers often target vulnerabilities in wallet software or the blockchain network itself. For example, they may exploit bugs in smart contracts or flaws in the wallet’s security protocols. In some cases, attackers have used methods like 51% attacks, where they gain control of the majority of the network’s mining power, allowing them to alter the blockchain and double-spend coins.

Physical theft

In some cases, hackers or thieves physically steal hardware wallets or other devices containing private keys. If the wallet is not adequately secured with a PIN or other protective measures, the thief can gain access to the stored cryptocurrencies. This underscores the importance of keeping hardware wallets in secure locations and using all available security features

What are the most targeted cryptocurrencies for hacks?

• Ethereum (ETH): Ethereum remains one of the most targeted cryptocurrencies due to its popularity and the vast number of decentralized applications (dApps) and smart contracts deployed on its network. Vulnerabilities in smart contracts and the complexity of its ecosystem make it a prime target.
• Bitcoin (BTC): As the most widely recognized and valuable cryptocurrency, Bitcoin attracts significant attention from hackers. Exchanges and individual wallets holding Bitcoin are frequent targets due to the high potential returns from successful breaches.
• Binance Coin (BNB): The Binance Smart Chain (BSC) and its native token BNB have seen numerous attacks, particularly on decentralized finance projects and protocols built on BSC. These include flash loan attacks and exploits in DeFi applications.
• Solana (SOL): Solana has experienced multiple network outages and exploits, making it a target for hackers. The rapid growth and adoption of its ecosystem, combined with occasional vulnerabilities in its code, have led to significant attacks.
• Toncoin (TON): Recently, Toncoin users have been targeted through phishing scams on platforms like Telegram, exploiting the popularity and growing user base of the cryptocurrency.

How can I secure my crypto assets against hacks?

Use hardware wallets

Hardware wallets, such as Ledger or Trezor, store private keys offline, making them less susceptible to online attacks. These devices provide an extra layer of security by requiring physical access to sign transactions. Always purchase hardware wallets directly from the manufacturer to avoid tampered devices.

Enable two-factor authentication

Two-factor authentication (2FA) adds an additional security layer by requiring a second form of verification, typically a code from an authenticator app or a hardware token. This helps protect your accounts even if your password is compromised. Avoid SMS-based 2FA due to the risk of SIM swapping attacks.

Use strong, unique passwords

Create strong, unique passwords for each of your accounts. Use a combination of letters, numbers, and special characters. Avoid using easily guessable information such as birthdays or common phrases. Consider using a reputable password manager to generate and store complex passwords securely.

Regularly update software

Keep your wallet software, operating system, and any related applications up to date. Software updates often include security patches that fix vulnerabilities discovered in previous versions. Regularly updating your software reduces the risk of being exploited through known vulnerabilities.

Be cautious of phishing scams

Always verify the authenticity of websites and emails before entering sensitive information. Look for secure (HTTPS) connections and double-check URLs for subtle misspellings. Avoid clicking on links or downloading attachments from unknown or suspicious sources. Educate yourself on common phishing tactics to recognize and avoid them.

Backup your private keys

Ensure you have a secure backup of your private keys or seed phrases. Store these backups in multiple secure locations, such as encrypted USB drives or physical copies stored in a safe. Avoid storing backups in easily accessible or online locations to reduce the risk of theft.

Use multi-signature wallets

Multi-signature (multi-sig) wallets require multiple private keys to authorize a transaction. This feature distributes control over the wallet, making it more difficult for a single point of failure to compromise the funds. Multi-sig wallets are especially useful for organizations or high-value individual holdings.

Avoid public Wi-Fi

Avoid accessing your crypto wallets or conducting transactions over public Wi-Fi networks. Public Wi-Fi can be easily compromised, allowing attackers to intercept your data. Use a virtual private network (VPN) if you need to access your wallet on the go, providing an additional layer of security.

Monitor your accounts

Regularly monitor your accounts for any suspicious activity. Set up alerts for transactions and review your account history frequently. Early detection of unauthorized activities can help mitigate potential losses.

Educate yourself continuously

Stay informed about the latest security threats and best practices in the cryptocurrency space. Join reputable forums, follow security experts, and participate in community discussions to keep your knowledge up to date. Continuous education helps you stay ahead of potential threats and adapt your security measures accordingly.

How to detect if your crypto wallet has been compromised

• Unexpected transactions: Monitor your wallet for any unauthorized or unexpected transactions. If you notice any transfers or withdrawals that you did not initiate, it could be a sign that your wallet has been compromised.
• Changes in account settings: Be alert to any changes in your account settings or personal information that you did not authorize. Hackers might change your recovery email, phone number, or security settings to gain control over your account.
• Unusual login locations: Check for login attempts from unfamiliar locations or devices. Many wallet services provide logs of recent login activities, which can help you identify unauthorized access.
• Alerts from security software: Pay attention to alerts from your antivirus or anti-malware software indicating suspicious activity on your device. These alerts might suggest that your device has been compromised, potentially putting your wallet at risk.
• Performance issues: Notice any unusual slowdowns, crashes, or erratic behavior of your wallet application. Malware or unauthorized processes running in the background can affect the performance of your device.

Can a hardware wallet be hacked?

If an attacker gains physical access to a hardware wallet, they could potentially exploit vulnerabilities in the device. For example, if the attacker can tamper with the device or extract information from its memory, they might be able to access the stored private keys. To mitigate this risk, always purchase hardware wallets from reputable sources and inspect them for signs of tampering before use.

Supply chain attacks occur when a hardware wallet is compromised during manufacturing or distribution. This could involve installing malicious firmware or hardware modifications. Ensuring you buy directly from the manufacturer or authorized resellers reduces the risk of encountering a compromised device.

Although rare, software vulnerabilities in the firmware of hardware wallets can be exploited by attackers. Regularly updating the firmware of your hardware wallet can help protect against known vulnerabilities. Reputable hardware wallet manufacturers frequently release updates to address security issues.

While hardware wallets themselves are secure, users can still fall victim to phishing attacks or social engineering. For instance, if a user is tricked into entering their recovery seed phrase on a fraudulent website or sharing it with a scammer, their funds can be stolen. It’s crucial to keep the recovery seed phrase offline and secure, and only enter it directly into the hardware wallet when necessary.

Advanced attackers might use side-channel attacks, which analyze the physical emissions of a device (like electromagnetic leaks or power consumption patterns) to extract information. These attacks are highly sophisticated and typically require close proximity to the device and specialized equipment.

Security practices to follow while transacting with crypto

• Use hardware wallets: Store your private keys in a hardware wallet to keep them offline and away from potential online threats. Hardware wallets provide an additional layer of security by requiring physical access to authorize transactions.
• Enable two-factor authentication (2FA): Always enable 2FA on your wallet and exchange accounts. This adds an extra layer of security by requiring a second form of verification, such as a code from an authenticator app, in addition to your password.
• Use strong, unique passwords: Create strong, unique passwords for each of your accounts. Avoid reusing passwords and consider using a password manager to generate and store complex passwords securely.
• Keep software updated: Regularly update your wallet software, operating system, and any related applications. Updates often include security patches that fix vulnerabilities discovered in previous versions.
• Verify recipient addresses: Double-check the recipient’s address before sending any cryptocurrency. Malware can alter copied addresses to redirect funds to the hacker’s wallet. Verify the address by comparing the first and last few characters.
• Be wary of phishing scams: Always verify the authenticity of websites and emails before entering sensitive information. Look for secure (HTTPS) connections and double-check URLs for subtle misspellings. Avoid clicking on links or downloading attachments from unknown or suspicious sources.
• Use secure networks: Avoid conducting transactions over public Wi-Fi networks. Public networks can be easily compromised, allowing attackers to intercept your data. Use a virtual private network (VPN) for an added layer of security when accessing your wallet on the go.
• Regularly backup private keys: Ensure you have a secure backup of your private keys or seed phrases. Store these backups in multiple secure locations, such as encrypted USB drives or physical copies in a safe. Avoid storing backups in easily accessible or online locations.
• Monitor your accounts: Regularly check your accounts for any suspicious activity. Set up alerts for transactions and review your account history frequently. Early detection of unauthorized activities can help mitigate potential losses.
• Educate yourself continuously: Stay informed about the latest security threats and best practices in the cryptocurrency space. Join reputable forums, follow security experts, and participate in community discussions to keep your knowledge up to date.

Final thoughts

Securing cryptocurrency assets requires a comprehensive understanding of potential threats and the implementation of robust security practices. From phishing attacks and malware to sophisticated exploits targeting exchanges and smart contracts, the landscape of crypto hacks is diverse and continually evolving.

In 2024, significant incidents and increased sophistication of attacks underscore the importance of proactive security measures. Utilizing hardware wallets, enabling two-factor authentication, maintaining strong, unique passwords, and staying vigilant against phishing scams are crucial steps in protecting digital assets.

By staying informed and adopting best practices, users can significantly reduce the risk of unauthorized access and safeguard their investments in the dynamic world of cryptocurrencies.

Frequently Asked Questions

1. 01.

   How common are crypto hacks?

   

   Crypto hacks are quite common and have been on the rise. In the first half of 2024, cybercriminals stole $1.38billion worth of crypto assets, which is more than double the amount stolen during the same period in 2023. These incidents highlight the persistent vulnerabilities within the crypto ecosystem and the ongoing challenges in securing digital assets.

2. 02.

   What crypto is most used by criminals?

   

   Bitcoin (BTC) is the most commonly used cryptocurrency by criminals due to its widespread adoption and perceived anonymity. It’s frequently used for illegal transactions on the dark web and in ransomware attacks. Ethereum (ETH) is also targeted due to its extensive use in decentralized applications, making it attractive for various cybercrimes. Privacy-focused coins like Monero (XMR) are also favored for their enhanced anonymity features.

3. 03.

   How do hackers hack crypto?

   

   Hackers use various methods to gain unauthorized access to crypto assets. Phishing attacks trick users into revealing private keys or login credentials through fake websites or emails. Malware and keyloggers can capture sensitive information from infected devices. SIM swapping allows hackers to bypass two-factor authentication by taking control of a victim’s phone number. Additionally, exploiting software vulnerabilities and employing social engineering techniques are common tactics used to compromise crypto wallets and accounts.