The first recognized cryptocurrency, Bitcoin, was created in 2009. If you’re not familiar with cryptocurrency, it’s an electronic form of payment with encrypted ledgers. Since those early days, firms and people looking for these unconventional financial options have grown more and more interested in digital currency. Cryptocurrency poses security and financial dangers, including a lack of control and the opportunity for users to stay anonymous, much like any other technology.
Learn more about one of the most destructive crypto cyberattacks in the next paragraphs, as well as about typical cyberattacks employed by cybercriminals.
Wormhole: What Is It?
“Wormhole” is a term used to describe one of the largest blockchain connections between the Solana and Ethereum blockchain networks. Users can transfer cryptocurrencies and NFTs (non-fungible tokens) between the two networks using this web-based tool. The Binance Smart Chain, Avalanche, Oasis, Ethereum, Terra blockchain networks, and Polygon are just a few of the ones that this crypto bridge communicates with.
The user would utilize Wormhole to store their 20 ether (ETH) within a smart contract on the Ethereum network, for instance, if they transferred 20 ETH from Ethereum to Solana. Digital contracts, which are actually smart contracts, are kept on blockchain networks and are designed to execute automatically when certain conditions are satisfied. These contracts manufacture or distribute a wrapped token of the user’s requested token while momentarily locking the original cryptocurrency.
The user can mint an identical quantity of wrapped ETH upon that Solana network once the contract is implemented. A wrapped token symbolizes another blockchain’s cryptocurrency or another kind of token with the same value as the initial cryptocurrency. Wrapped tokens can exchange for the original cryptocurrency right after they are utilized on non-native blockchain networks, in contrast to the original coin.
Cyber Wormhole Attack
Cybercriminals discovered a weakness in the Wormhole platform on February 2, 2022, which allowed them to steal an incredible $321 million in wrapped Ethereum (wETH). Wormhole promptly acknowledged the attack and close down its platform after it was identified as a hack. On the Solana blockchain network, the hackers created 120,000 wETH tokens before stealing them. Furthermore, the cryptocurrency criminals exchanged 80,000 of the hijacked wETH tokens for Ethereum and sold the remainder of the tokens on Solana. This was, in fact, the biggest hack of the year and the fourth-biggest crypto assault of the modern period.
Wormhole temporarily halted all token transactions on its blockchain bridge throughout the investigation. The exploit was patched for 16 hours by the Wormhole team. Users’ assets weren’t impacted by the vulnerability since a trading company called Jump Crypto recovered all of the taken ETH.
The hacker’s address was also messaged by a Wormhole representative who offered a $10 million bug bounty and a Whitehat agreement in compensation for surrendering all of the stolen money. Whitehat contracts allow cybersecurity professionals with ethics to discover security holes in networks, software, or hardware in exchange for a set payment and, presumably, avoid legal repercussions.
It should come as no surprise if you follow tech news that cryptocurrencies have security vulnerabilities. A wormhole is a particularly dangerous blockchain bridge because it’s so difficult to code. The fact that these crypto bridges have to work with so many different chains suggests that there may be security flaws that thieves might exploit.
Let’s examine some of the most typical cyberattacks that affect the cryptocurrency market.
Fraudulent Registration Forms
User’s private information can be stolen by hackers from online registration forms. These crooks can then make money by selling the disclosed information on the underground market.
Cryptojacking is the act of someone using someone else’s phone, tablet, computer, or server without authorization. The intruder can mine bitcoin with this access and make money by selling the tokens they have stolen. This attack is often carried out by cybercriminals who trick the victim into clicking a malicious email link that downloads crypto-mining software onto the victim’s computer.
Cybercriminals will try hard to con individuals when it involves money, especially cryptocurrency. Hackers con crypto users in a number of ways, including:
- Creating phony APKs (Android Application Packages) to deceive users into installing phony applications on their OS’.
- Fake domains that resemble a blockchain platform in the official sense.
- Malicious URLs and attachments are used in phishing campaigns and adverts on social networking sites.
- Delivering spam emails to entice users to provide personal data or purchase or trade tokens on phony websites.
Compromized Trading Platforms
In order to steal bitcoin from consumers, cybercriminals take advantage of the trading platforms’ lack of control, flexibility, and anonymity. Since the creation of the first digital token, there are several cases that demonstrate this.
A DeFi (Decentralized Finance Initiative) named PolyNetwork, which was compromised in 2021 and lost a staggering $600 million is another important case in addition to the Wormhole attack. Another illustration is Bitmart, a cryptocurrency trading platform, which was similarly compromised in 2021 and suffered a loss of approximately $200 million out of just one business account.
Hackers can obtain unauthorized access to sensitive data, including credit card details, bank account numbers, and Social Security numbers by using the phishing tactic.
Phishing operations are made by hackers specifically for crypto trading platforms. The objective is to deceive visitors into providing their login information on a phony website, mobile application, or form. Once the scammers have the stolen login credentials, they’ll either sell the data for a profit or keep it hostage until the victim pays the required ransom.
Applications from Third Parties
In order to obtain user data, hackers sometimes target third-party applications.
Cybercriminals will utilize this sensitive information to carry out attacks on blockchain systems. As yearly news stories demonstrate, these massive hacks often have a severe effect on millions of cryptocurrency users. It is clear that these hacks have a significant influence on many people’s life because many individuals invest in cryptocurrencies for their families’ future, business prospects, and emergency finances.
Attacks on Crypto Wallet Apps
Imagine that a consumer installed a Trojan program on their phone. The malware app snatches $600,000 in Bitcoin out from the wallet app after being loaded. Yowza! The “Sharkbot” Android Trojan performs precisely this action. Sharkbot circumvents verification processes to start money transfers from cryptocurrency and banking apps on infected devices. Transfers can occur, for instance, the moment you use your e-wallet to deposit or withdraw funds at online sportsbooks at this site, regardless of their top-notch security techniques and specialization in betting using cryptos. It won’t be up to the betting sites… To make matters worse, spyware prohibits people from eliminating it.
Hackers frequently attempt to exploit the APIs connecting the crypto wallet to the backend service powering the app in addition to utilizing malware; 99% of the mobile apps that researchers overturned engineered contained hardcoded API keys and tokens, such as usernames and passcodes to third-party services, according to a white hat hacker who examined the security of 30 apps from major international financial institutions and cryptocurrency companies.
How to Avoid Cyberattacks on Blockchain
Cybercriminals can take advantage of a world that is still learning about cryptocurrencies because they can still use their sophisticated abilities and resources as cryptocurrency is still viewed as new in a financial industry that’s dominated by more traditional methods.
To execute small- and large-scale cyberattacks on blockchain platforms, third-party apps, businesses, and individual users, these criminals have a variety of strategies at their disposal. Although some people think that cryptocurrencies should be outlawed because they lacked laws and centralized control like traditional financial institutions do, it’s more probable that digital currency will remain.
Instead, organizations and people must develop defenses against these threats. Maintaining knowledge of the most recent cyberattacks, security best procedures, and suggestions, such as tokenizing confidential data, is essential. Companies may choose which blockchain networks to employ and develop a layered security strategy that safeguards what matters most to them by being aware of these vulnerabilities.