Cryptocurrency continues to grow in popularity each year, which has placed crypto exchanges squarely in the crosshairs of cybercriminals looking to steal currency and data. As such, the security of cryptocurrency accounts has become a major concern for users worldwide. One threat in particular, cryptocurrency account takeover, targets vulnerabilities within cryptocurrency accounts and can lead to significant financial losses for both the user and the enterprise.
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The Economics of Account Takeover Attacks
What is cryptocurrency account takeover?
Cryptocurrency account takeover refers to the unauthorized access of someone's cryptocurrency exchange account. This online fraud is typically achieved through various methods, such as phishing, social engineering, or malware attacks that allow hackers to obtain login credentials. Once attackers gain control of an account, they can steal funds, initiate unauthorized transactions, or commit other downstream cyberattacks and fraud like identity theft.
The role of bots in account takeovers
Bots and botnets, which can be used to automate many cybercriminal processes, are utilized to take over cryptocurrency accounts by stealing login credentials and compromising security measures such as two-factor authentication or one-time passwords (OTP). Additionally, these automated tools can gain unauthorized access to accounts by conducting social engineering attacks, brute forcing passwords or as part of a credential stuffing attack. The latter is when bots use a variety of username and password combinations until they are able to access an account. Bots can perform multiple login attempts in a short period of time, making it difficult for users to detect fraudulent activity. Cybercriminals can also use bots to steal sensitive information such as private keys, resulting in financial losses for impacted users.
How do cryptocurrency account takeovers happen?
Cryptocurrency account takeover can occur in several ways. Scammers use phishing scams to trick users into revealing their login credentials, often through fake websites or emails that appear legitimate. Malware attacks can also be used to steal login information or take control of a user's device, providing direct access to their cryptocurrency account. IoT devices infected with malware can also be used to form botnets that carry out attacks at scale.
Social engineering is another method where cybercriminals use personal information gathered from social media and other sources to gain unauthorized access to accounts. Users who fail to use strong passwords or enable two-factor authentication are more vulnerable to account takeover due to weak security practices.
Password reuse attacks happen when a user employs the same password across multiple accounts, including cryptocurrency accounts. Cybercriminals are then able to gain access to a user's password through data breaches of other websites and then use that information to infiltrate their cryptocurrency account.
Common signs of a cryptocurrency account takeover
Unusual account activity and IP addresses
Detecting cryptocurrency account takeover is crucial for protecting your digital assets. One way to identify potential takeovers is to monitor for unusual account activity, such as unexpected login attempts or changes to account information. Another effective method is monitoring IP addresses associated with login attempts as multiple attempts from different IP addresses may indicate unauthorized access.
Abnormal transaction patterns
Detecting cryptocurrency account takeover is crucial in preventing fraudulent activity. One way to do this is by identifying abnormal transaction patterns, which can be a red flag for potential account takeover. Keep an eye out for sudden changes in the frequency, amount or destination of transactions.
Login attempts from unrecognized devices and locations
One way to detect a cryptocurrency account takeover is by monitoring login attempts from unrecognized devices and locations. If you notice any suspicious activity on your account, it's important to take immediate action. Implementing multi-factor authentication can add an extra layer of security to your cryptocurrency account, as well as regularly changing passwords and using strong, unique passwords.
How users can prevent cryptocurrency account takeovers
Cryptocurrency account takeover is a serious concern for many investors. However, there are several steps you can take to prevent such attacks. The following common measures will help protect your cryptocurrency from unauthorized access and keep it safe from potential theft by cybercriminals.
Two-factor authentication is a popular option that requires a second form of verification, such as a code sent to your mobile phone or email, before access to your account is granted. Biometric authentication is another effective method that uses unique physical characteristics like fingerprints or facial recognition to verify your identity.
Additionally, using strong passwords and regularly updating them can help increase the security of your account. Keeping your devices and software up-to-date with the latest security patches and updates can also prevent unauthorized access. It's important to be cautious when clicking on links and avoid downloading unknown software that could compromise the security of your account.
Arkose Labs secures businesses from account takeovers
Arkose Labs provides long term solutions against account takeover. By combining its global risk engine with adaptive step-up challenges, Arkose Labs makes it increasingly costly for cybercriminals to orchestrate attacks at scale. Arkose Labs profiles all activity using continuous intelligence and presents targeted friction, in the form of Arkose Matchkey challenges, to suspicious users to ensure that criminal activity is accurately detected.
MatchKey challenges are easy for genuine users to complete, providing legitimate consumers an opportunity to prove their authenticity. However, these challenges prevent cybercriminals from orchestrating large-scale account takeover attacks by dramatically increasing the time and resources required to pass authentication steps at scale.
If you would like to partner with Arkose Labs to keep your business and its users secure from cybercriminals and bot-driven attacks, book a meeting with us today.
Did you know that Arkose Labs also offers a $1M Credential Stuffing Warranty? The efficacy of the platform against automated credential stuffing attacks on logins allows Arkose Labs to be the only vendor to offer a limited warranty that covers losses in the event of a successful attack. Read more here.