According to ScamSniffer, a staggering $300 million was siphoned off from crypto wallets in 2023. It marks a significant rise in cyber crime with the anticipation of rising prices due to the upcoming Bitcoin halving event and Spot Bitcoin ETFs. The surge in crypto wallet losses due to phishing scams and wallet drainers has proven that despite innovations using blockchain currencies, much of the same old methods still work: fake sites, and phishing.
As businesses safeguard their client’s digital assets, there are several ways to protect clients, information, and any company’s future from crypto wallet drainers.
The Scale of Wallet Drainers
In 2023, the crypto industry was rocked by a series of scams that led to a staggering loss of $300 million. This figure is not just a statistic; it represents a significant blow to the trust and security in the digital asset market.
According to cycles, Bitcoin is scheduled for a bull market this year. So as news grows of the upcycle in coin prices, new coiners are entering the market unaware of the importance of privacy and protection. Cyber criminals are more than aware.
Since the start of 2023, the amount of phishing sites using wallet drainers has only increased.
The growth in the number of crypto wallet drainers shows that the market for theft is an unresolved security gap many companies offering token storage have yet to solve. Not only are the amounts stolen growing, but the number of crypto wallet drainers are also increasing. In a legal industry, that would be called a “growth market.”
But $300 Million stolen isn’t legal, that’s theft. Here’s how it works.
How Crypto Wallet Drainer Scams Work
Wallet Drainers are a form of malware specifically designed to target cryptocurrency wallets. They work by tricking users into granting access to their wallets, often through phishing websites that mimic legitimate platforms. Once access is granted, these drainers transfer funds from the victim’s wallet to the scammer’s account.
The system uses an old method: phishing. Phishing in the crypto world often involves creating fake websites or sending fraudulent emails that resemble those from legitimate sources. These sites and emails lure unsuspecting users into entering their private keys or wallet credentials, which scammers then use to access and drain the victims’ wallets.
Beyond technical means, scammers also use social engineering tactics. They manipulate users into divulging sensitive information or performing actions that compromise their crypto assets. This could involve fake customer support, fraudulent investment opportunities, or impersonating trusted figures in the crypto community.
How these Scams Impact Crypto Storage Companies and Others:
- Financial Losses: The most immediate and obvious impact is the financial loss suffered by businesses and individual investors. For businesses, this could mean a significant portion of their operational or investment capital. For individuals, it could represent life savings or critical funds.
- Erosion of Trust: These scams have a detrimental effect on the trust in the cryptocurrency market. They create a sense of uncertainty and fear, which can deter both current and potential investors from participating in the crypto economy.
- Operational Disruption: For businesses, falling victim to these scams can lead to operational disruptions. The loss of funds might mean an inability to finance ongoing projects, pay staff, or invest in growth opportunities.
- Reputational Damage: Businesses that fall victim to these scams often suffer reputational damage. If customer funds are affected, the trust in the business can be severely undermined, leading to a loss of clientele and market position.
- Regulatory and Legal Complications: Victims of these scams may also face regulatory scrutiny and legal challenges, especially if customer funds are involved or if there were lapses in adhering to cybersecurity best practices.
5 Solutions for More Secure Wallets
DomainSure offers end-to-end management, monitoring and protection of domain names, DNS infrastructure & I.T. perimeter. Basically, DomainSure offers organizations the opportunity to prevent major financial and reputation losses at minimal cost.
- Never Expire Protection: This service ensures that domain names never lapse unintentionally, preventing scammers from snatching expired domains.
- Never Monetize Guarantee: Expired domains can allow scammers to monetize a domain organizations hold. DomainSure guarantees never to cause domains to lapse or let scammers redirect traffic to phishing websites set up to drain a client’s crypto wallet.
- Advanced Threat Detection: Utilizing cutting-edge technology, DomainSure scans for potential threats, including monitoring the dark web and analyzing unusual network activities. DomainSure can monitor the web to recognize associated domains that could be used for phishing.
- Real-time Alerts and DNS Monitoring: Continuous monitoring and immediate alerts enable businesses to respond swiftly to any potential security breaches or irregularities.
- Free Domain Takedowns: If DomainSure find a phishing site mimicking a company’s domain or brand, DomainSure takes it down at no additional cost.
As the crypto world grows in value and complexity, the need for cybersecurity solutions like DomainSure’s unique DNS security solutions. Businesses, especially those offering secure crypto storage to clients must recognize the importance of protecting digital assets from the same old scams: fake sites and phishing. DomainSure protects businesses from those threats proactively. By doing so, organizations not only protect client’s assets but also contribute to the overall security and stability of the broader crypto ecosystem.