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 as 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.
What is Wormhole?
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 non-fungible tokens (NFTs) between the two networks using this web-based tool. The Avalanche, Binance Smart Chain, Ethereum, Oasis, Polygon, and Terra blockchain networks are just a few of the ones that this crypto bridge communicates with. The user would utilize Wormhole to lock their 20 ether (ETH) within a smart contract on the Ethereum network, for instance, if they transferred 20 ETH from Ethereum to Solana. Smart contracts are digital contracts that are kept on blockchain networks and are designed to execute automatically when certain conditions are satisfied. These contracts mint or release 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 on the Solana network once the contract is implemented. A wrapped token symbolizes another blockchain’s cryptocurrency or an other kind of token with the same value as the original cryptocurrency. Wrapped tokens can be utilized on non-native blockchain networks and exchanged for the original cryptocurrency, in contrast to the original coin.
Wormhole Cyberattack
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 shut down their 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 stolen wETH tokens for Ethereum and sold the remainder 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 transfers on its blockchain bridge throughout the investigation. The exploit was patched for 16 hours by the Wormhole team. Users’ assets were not impacted by the vulnerability since a trading company called Jump Crypto replaced all of the stolen ETH. The hacker’s email account was also messaged by a Wormhole representative who offered a $10 million bug bounty and a Whitehat agreement in exchange for returning all of the stolen money. Whitehat contracts allow ethical hackers to discover security holes in networks, software, or hardware in exchange for a set payment and, presumably, avoid legal repercussions.
Common Cyberattacks
It should come as no surprise if you follow tech news that cryptocurrencies have security vulnerabilities. Wormhole is a particularly dangerous blockchain bridge because it is 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.
Compromised Registration Forms
Users’ 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
Cryptojacking is the act of someone using someone else’s computer, phone, tablet, or server without authorization. The hacker 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. Alternately, hackers may insert malicious JavaScript code into a webpage or advertisement that will launch when the user’s browser environment loads it. Sadly, because this code executes in the background, it’s possible that the user won’t be aware that their cryptocurrency has been taken. Running and operating significantly slower than usual are two indications that a user’s device is compromised.
Cryptocurrency scams
Cybercriminals will try hard to con individuals when it comes to money, especially cryptocurrency. Hackers con crypto users in a number of ways, including:
- Creating phony Android application PacKages (APKs) to deceive users into installing phony applications (OS).
- fake domains that resemble a blockchain platform in the official sense.
- Malicious URLs and attachments are used in phishing ads and campaigns on social networking sites.
- sending spam emails to entice users to provide personal data or purchase or trade tokens on phony websites
Hacked 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 decentralized finance (DeFi) initiative named PolyNetwork, which was hacked 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 from just one business account.
Phishing
Hackers can obtain unauthorized access to sensitive data, including credit card details, Social Security numbers, and bank account 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 will either sell the data for a profit or keep it hostage until the victim pays the required ransom.
Third-party applications
In order to obtain user data, hackers sometimes target third-party applications. Cybercriminals will utilize this sensitive information to launch 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 attacks have a significant influence on many people’s life because many individuals invest in cryptocurrencies for their families’ future, business prospects, and emergency finances.
How to Combat Blockchain Cyberattacks
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 is dominated by more traditional methods. To execute small- and large-scale attacks against blockchain platforms, third-party applications, 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 lack 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. Businesses also need to keep up with the most recent hacks, security best practices, and guidelines. 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.
