7 ways cybercriminals steal Crypto currency

The threat of phishing attacks in the cryptocurrency domain is significant and ever evolving. The report by Check Point Research warns the cryptocurrency community about the growing trend of sophisticated phishing attacks. These attacks are prevalent across numerous platforms including Ethereum, Binance Smart Chain, Polygon, and Avalanche.

The report emphasizes the need for collective efforts towards building a secure environment for digital assets. Here are 10 common techniques used by hackers: deceptive campaigns and fake websites, mimicking legitimate websites, wallet connection requests, interaction with malicious smart contracts, exploiting the 'Permit' function in ERC 20 tokens, stealthy asset transfer and obfuscation, and the lack of blockchain trace in some cases.

The threat of phishing attacks in the cryptocurrency domain is significant and ever evolving. The report urges the community to stay informed and cautious, emphasizing the need for collective efforts towards building a secure environment for digital assets. According to a report by Check Point Research, the cryptocurrency community is warned about a growing trend in sophisticated phishing attacks.

These attacks are not confined to a single blockchain network; they are prevalent across numerous platforms including Ethereum, Binance Smart Chain, Polygon, and Avalanche. Here are 10 common techniques used by hackers. Deceptive Campaigns and Fake Websites: The process often begins with malicious actors creating fake airdrop campaigns or phishing schemes.

These are usually promoted on social media or via email, offering free tokens or other incentives to lure users. The attackers design these campaigns to appear legitimate and convincing. Mimicking Legitimate Websites: Users who respond to these campaigns are directed to fraudulent websites. These websites are carefully crafted to mimic genuine token distribution platforms or wallet interfaces, making it difficult for users to distinguish them from the real ones.

Wallet Connection Requests: Once on these deceptive sites, users are prompted to connect their digital wallets . This step is crucial for the attackers, as it lays the groundwork for the subsequent theft. The connection request appears harmless, often under the guise of verifying the user’s identity or account to proceed with the token claim.

Interaction with Malicious Smart Contracts: The most critical phase involves the user being induced to interact with a malicious smart contract. This interaction is often disguised as part of the process to claim the promised airdrop or benefit. The smart contract contains hidden functions that, when executed, alter the security settings of the user's wallet or directly initiate unauthorized transactions.

Exploiting the 'Permit' Function in ERC 20 Tokens: A specific method used by these drainers is the manipulation of the 'Permit' function in ERC 20 tokens. This function allows token holders to approve a spender (like a smart contract) to transfer tokens on their behalf. The attackers trick users into signing a message off chain with their private key, setting up the allowance for the attacker's address.

This technique is insidious because it doesn't require an on chain transaction for each approval, making the malicious activity less noticeable. Stealthy Asset Transfer and Obfuscation: After gaining access, the attackers then transfer assets out of the user’s wallet. They employ techniques like using cryptocurrency mixers or initiating multiple transfers to obscure the trail of the stolen assets, making it challenging to trace and recover them.

No Blockchain Trace in Some Cases: In the case of off chain signing, like with the 'Permit' function, there is no direct trace left on the blockchain, as the approval and transaction initiation happens off chain. This makes it even more challenging to detect and trace fraudulent activities.

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