Cryptocurrency is the technology buzzword for the last decade and this form of money is here to stay. While a lot of individuals have adopted cryptocurrency as either an investment means or transaction means, some are hesitant due to the complexity, volatility, and security concerns.
Let’s admit it, anything that is digital and in fact, anything electronic has a chance (even a minute one) of being hacked.
There have been cases of cryptocurrencies being hacked and millions of dollars stolen from the users’ wallets, and this can cause friction to anyone who would otherwise look forward to adopting cryptocurrencies.
Here’s a guide on everything about cryptocurrency hacking and recovery so you have more light on the overall security.
Can Crypto Wallets Be Hacked?
Crypto wallet can be hacked or not It depends on which Crypto wallet you use. If there is no bug or glitch in the crypto wallet and your secret key is secure, not known to others so, it’s nearly impossible to hack the crypto wallet.
If you store your wallet secret key phrase in software or server, computer, or mobile phone, all these are vulnerable to remote attack on the internet, so hackers can able to get your secret key and your wallet be hacked.
In cryptocurrency, all transactions are stored publicly on the blockchain which is decentralized and accessible anytime.
It is almost impossible to hack the blockchain, however, crypto wallets can indeed be hacked if the user’s credentials leaked or if it does not have adequate security measures. Therefore, never give access to your wallet account to anyone, and never share your private key.
Can Stolen Crypto Be Recovered?
Here’s the paradox – the good and the bad part about cryptocurrencies are that it is decentralized. In the case of credit/debit cards for example, if you notice any fraudulent pattern in the bank statement, account balance, access to the account, etc.
you can simply raise a dispute with the bank or the card issuing authority, and the issue is typically solved soon. In the case of cryptocurrency, there is no central authority to protect the funds of investors and consumers.
It is nearly impossible for the stolen cryptocurrency to be recovered. Although you may track the blockchain with your stolen cryptocurrency transaction, the encrypted nature and anonymous nature of the currency makes it hard to track.
It becomes even harder if the thief has converted the cryptocurrency back to fiat currency via an exchange.
Even if you do manage to trace the currency and report it to the authorities, there is just not enough technical expertise to recover the stolen crypto back. Almost 100% of the stolen cryptocurrency till now could never be retrieved by the user.
Are Crypto Wallets Safe?
Cryptocurrency wallets typically store one or more cryptocurrencies, and they can be accessed through either a mobile or a desktop application.
There are hardware crypto wallets as well that store both the public and private keys and are removed from the Internet.
It’s hard for offline wallets to be stolen by hackers unless they have physical access to them, so the question of online data vulnerability on servers, etc. is removed. I
n the case of online wallets, many of them nowadays are secured with phrases (during login), fingerprint encryption, and multiple layers of authentication to access the funds. However, they are still vulnerable to attacks.
Also Read: What Does 1000x Mean In Crypto?
How To Secure Your Crypto Wallet?
If you are planning to have your funds on online wallets, here are some tips you can follow to secure it:
1. Open Your Wallet Only In The Most Reputed Platforms
Open your wallet only in the most reputed platforms (Coinbase, Trust Wallet, MetaMask etc)
While browsing through the tons of cryptocurrency wallets available online, first check if they can hold the cryptocurrency you want to store.
Second, check if they are available for operation in your region.
Thirdly, do read its reviews online and if possible, talk to existing customers to understand its security measures better.
2. Activate Complete Security Measures
Enabling two-factor authentication is essential in all your crypto wallets. Here you will need to verify yourself to be eligible to deposit and withdraw funds.
That keeps it safe from trespassing attempts to log in to your wallet. After this, encrypt your wallet with strong passwords and lock the cryptocurrencies if someone tries to forcefully log in to your account.
Unless the thief knows the password, they won’t get access to the coins. Never share this password with anyone.
3. Use A Secured Internet Connection
Stay away from public networks because they are almost always unsecured and hackers can steal confidential information!
If you are outside and you need to access the Internet, use the mobile data to access them. It is even recommended to use a well-known VPN and ensure that Bluetooth is off, to ensure there are no unrequired connections with other devices in the vicinity.
4. Make Use Of Multi-Signature Feature
Some wallets have this feature which requires multiple users to digitally sign to enable access to the funds.
Unless these users approve of the login, the hacker will not be able to touch the funds. If the cryptocurrency wallet has this feature, make use of it!
5. Change The Password To Your Crypto Wallet Regularly
While setting passwords, ensure that you use a combination of numbers, alphabets (capital and small letters), and special characters.
Also, make sure it offers no clue about any fact associated with you. Use different passwords for different cryptocurrency wallets.
6. Ensure The Wallet Is Updated Regularly
The software update of crypto wallets, whenever they are out, is essential because they offer bug improvements (usually).
Read through what the new updates are before attempting to update the crypto wallet. You can always connect with the team to understand other security features.
Also, protect your device (phone, computer) with a firewall, anti-virus and continuously scan for any potential malware or malicious files.
Apart from this, never share your private key with anyone and spread your cryptocurrency funds across multiple highly secure wallets.
Can You Track Stolen Cryptocurrency?
In theory, yes. Every transaction on the blockchain is printed on the ledger; you may see the ledger and track the cryptocurrency but the anonymity of the currency, complexity in accessing the ledger makes it almost impossible to reach the funds.
Also Read: Why Are CryptoPunks so Popular?
How To Recover Stolen Cryptocurrency?
There is no direct way to recover your cryptocurrency (it has always been almost impossible so far, however, here are some steps you can do).
1. Send A Notification To The Cryptocurrency Exchange
The faster you react after a cryptocurrency hack, the better. Notify the cryptocurrency wallet/exchange immediately, they often have information that is valuable in the investigation.
2. Contact Your Bank
If there were any transaction fees during the fraud transaction, inform the bank. They may begin the process of securing the account. Perhaps the hackers could stop further damage from occurring.
How To Report Stolen Cryptocurrency?
If you see that your cryptocurrency has been stolen, it is highly recommended to report it to the authorities. Here is how you can do it:
To begin with, you can report to the local police station. And if the stolen cryptocurrencies have been from an exchange, report it to the exchange as well. Alternatively, you can report to the following higher authorities,
- Report to the FTC (http://www.reportfraud.ftc.gov/)
- Report to the Commodity Futures Trading Commission (http://www.cftc.gov/Complaint)
- Report to the US Securities and Exchange Commission (https://www.sec.gov/tcr)
Conclusion
This is all that you need to know about cryptocurrency hacking. Be safe, implement all possible security measures and report even at the slightest doubts about a fraud.
