Bitcoin has been the buzzword in technology for the previous decade, and it is here to stay. While many people have welcomed cryptocurrencies as a way of investment or transaction, others are wary of the complexity, volatility, and security concerns.
Let’s face it: anything digital, and indeed anything electronic, has a possibility of being hacked (even a small one).
There have been incidents of cryptocurrencies being hacked and millions of dollars being taken from users’ wallets, which might generate friction for anyone who is considering embracing cryptocurrencies.
Here’s a comprehensive guide to cryptocurrency hacking and recovery so you can gain a better understanding of the overall security.
Can Crypto Wallets be Hacked?
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Is it possible to hack a cryptocurrency wallet? It depends on the type of cryptocurrency wallet you use. It is nearly impossible to hack a crypto wallet if there is no fault or glitch, and your private key is secure and not known to others.
If you save your wallet secret key phrase in software, a server, a computer, or a mobile phone, all of these are vulnerable to a remote internet attack, allowing hackers to obtain your secret key and compromise your wallet.
All transactions in cryptocurrency are recorded publicly on the blockchain, which is decentralized and accessible at any moment.
Although it is nearly impossible to hack the blockchain, crypto wallets can be hacked if the user’s credentials are exposed or if security measures are inadequate. As a result, never give anyone else access to your wallet account, and never reveal your private key.
Can Stolen Crypto be Recovered?
Here’s the catch: The fact that cryptocurrencies are decentralized is both a benefit and a drawback. If you discover any suspicious patterns in your bank statement, account balance, or account access, for example, you should report it.
You can just file a dispute with your bank or card issuer, and the problem will usually be resolved quickly. There is no central body to protect the funds of investors and consumers in the case of cryptocurrencies.
The recovery of the stolen cryptocurrency is practically impossible. Although you may monitor your stolen bitcoin transaction on the blockchain, the currency’s encrypted nature and anonymity make it difficult to do so.
It becomes even more difficult if the thief has used an exchange to transfer the cryptocurrency back to fiat currency.
Even if you are able to track down the currency and denounce it to the police, you will not be able to retrieve the stolen cryptocurrency due to a lack of technical skills. Till now, the user has been unable to recover nearly all of the stolen cryptocurrency.
Are Crypto Wallets Safe?
Wallets for cryptocurrencies typically store one or more cryptocurrencies and can be accessed via a mobile or desktop application.
Hardware crypto wallets, which hold both the public and private keys and are not connected to the Internet, are also available.
Offline wallets are difficult to steal unless hackers have physical access to them, hence the issue of online data vulnerability on servers, etc. is eliminated. I
When it comes to online wallets, many of them now use words (upon login), fingerprint encryption, and many layers of authentication to gain access to funds. They are, nevertheless, still subject to attack.
Also Read: What Does 1000x In Crypto Mean?
How to Secure Your Crypto Wallet?
If you intend to save your assets in online wallets, here are some security precautions to consider:
1. Open your Wallet only in the Most Reputed Platforms
Only use reputable platforms to open your wallet (Coinbase, Trust Wallet, MetaMask, etc.).)
While looking through the plethora of cryptocurrency wallets available online, make sure they can store the cryptocurrency you want.
Second, determine whether they are operational in your area.
Next, study online evaluations and, if possible, speak with current customers to have a better understanding of its security methods.
2. Activate Complete Security Measures
Two-factor authentication should be enabled in all of your crypto wallets. To be eligible to deposit and withdraw funds, you must first verify your identity.
This protects it from trespassing attempts to access your money. After that, encrypt your wallet with strong passwords and lock your coins if someone tries to log in to your account without your permission.
The thief will not be able to access the coins unless they know the password. Never reveal your password to anyone.
3. Use a Secured Internet Connection
Avoid public networks since they are nearly always insecure, allowing hackers to steal sensitive data!
If you need to access the Internet while outside, you can do so using mobile data. It is also recommended that you use a well-known VPN and turn off Bluetooth to ensure that no unnecessary connections with other devices are made.
4. Make Use of Multi-Signature Feature
This functionality is available in some wallets, and it requires multiple users to digitally sign to gain access to the cash.
The hacker will not be able to access the funds unless these users approve the login. Use this functionality if your cryptocurrency wallet has it!
5. Change the Password to your Crypto Wallet Regularly
Use a combination of numbers, alphabets (capital and small letters), and special characters when creating passwords.
Additionally, make certain that it contains no information about you. For each cryptocurrency wallet, use a different password.
6. Ensure the Wallet is Updated Regularly
Crypto wallet software updates are necessary whenever they are released since they frequently include bug fixes.
Before attempting to upgrade the crypto wallet, read over the new updates. You can always contact the team to learn about additional security features.
Additionally, use a firewall, anti-virus, and a constant scan for any suspected malware or malicious files on your device (phone, PC).
Apart from that, never give out your private key to anyone and disperse your your holdings among several extremely secure wallets.
Can You Track Stolen Cryptocurrency?
Yes, in theory. Every transaction on the blockchain is recorded in the ledger; you can look at the ledger and follow the cryptocurrency, but due to the currency’s anonymity and the difficulty of accessing the database, it’s nearly impossible to obtain the funds.
Also Read: What is the appeal of CryptoPunks?
How to Recover Stolen Cryptocurrency?
There is no easy method to get your cryptocurrency back (it has always been nearly impossible), but there are certain actions you may take.
1. Send a Notification to the Cryptocurrency Exchange
After a cryptocurrency hack, the faster you react, the better. Contact the cryptocurrency wallet/exchange right away; they frequently have crucial information for the investigation.
2. Contact Your Bank
Notify the bank if any transaction fees were charged during the fraud transaction. They could start the account security process. Perhaps the hackers will be able to prevent additional damage.
How to Report Stolen Cryptocurrency?
If you suspect that your bitcoin has been stolen, you should contact the authorities immediately. Here’s how to go about it:
You might start by reporting to the local police station. If the stolen coins came from an exchange, you should also notify the exchange. You can also report to the higher authorities listed below.
- Report to the FTC (http://www.reportfraud.ftc.gov/)
- Commodities Futures Trading Commission Complaint Report (http://www.cftc.gov/Complaint)
- Report to the US Securities and Exchange Commission (https://www.sec.gov/tcr)
Conclusion
This concludes our discussion of cryptocurrency hacking. Be cautious, take all necessary security precautions, and report any suspicions of fraud immediately.
