Digital coins can be lost for a variety of reasons – forgetting your wallet key, making a transaction to the wrong address, or becoming a victim of cybercriminals. Over the past four years, the number of bitcoin thefts has increased tenfold. Fraudsters use many ways to steal, including hacking into cryptocurrency exchanges and wallets, creating fake services and financial pyramids. Having personal keys or account data, hackers can take over users’ funds.
Is it possible to steal Bitcoin?
The possibility of coin theft always exists. This is one of the problems of cryptocurrencies. The growing popularity of digital coins and increased demand increases the interest of criminals. It is possible to protect against losses and secure assets by following simple procedures. However, there is no one hundred percent guarantee of reliability. Every trader should know what to do if bitcoins are stolen and how to properly protect assets. By following the necessary rules, it is possible to reduce the risk of coin theft.
Basic ways to steal bitcoins
As technology advances, digital finance theft is becoming more sophisticated. The main ways of stealing BTC are as follows:
• Cryptocurrency wallet theft.
• Stealing when converting at an exchanger.
• Hacking into a trading platform or user account.
• Identity theft in social phishing.
• Using bots or pyramid schemes to steal.
Investments. Users are forced to store their accumulated assets somewhere. Digital wallets are a common way to keep virtual funds. The developers of such services do everything to make the process of storing and using coins easier and more convenient, but often do not provide the proper degree of protection and security.
The operation of converting cryptocurrency into fiat money can end in the loss of funds. Exchangers are popular for their simple procedure and speed of transfers. Among such services, there are sites created by scammers. The theft of coins occurs at the stage of conversion – after the user sends the cryptocurrency, the attackers keep the virtual assets for themselves.
Hacking of exchange or account
Users who store funds on the trading platform can lose digital assets. Fraudsters break into exchanges and commit mass theft. Coins can also be stolen from a specific user by having access to their account. The easiest way is to hack into an email account and get the password. Then hackers can use the access recovery feature and steal virtual assets.
Vulnerabilities of online exchangers
Services request private keys to increase the speed and conduct transactions. Accordingly, the criminal who hacked the platform has access to the user data of the exchanger. There may be cases when the developers of the service themselves steal money. For example, the owners of the company decide to shut down the platform and steal the digital coins.
This method is popular for stealing any asset, not just cryptocurrencies. The purpose of social phishing is to get users to share personal information. The hack goes like this:
• The owner of the coins receives an email with a link to an external source.
• The link site is fake. It is often a copy of an exchange or wallet page.
• The user enters personal data, passwords.
• Attackers get access to the information.
• Using the information received, they steal funds from the real exchange.
Another method of phishing is fake ICOs or wallets. To protect yourself from being hijacked, you need to check if the website address matches the real one. A reliable way is to enter the link into the line yourself.
Fake bots in social networks
Mobile services in messengers are a new way to conduct transactions with cryptocurrencies. Bots can be used to buy and exchange digital assets, for example, in Telegram. To steal coins, hackers create their own services, promising low commissions and additional convenience for financial transactions.
Another way to steal cryptocurrencies is a fraudulent project. The creators advertise a new system and attract investments. Owners of cryptocurrencies, believing in the prospects of the project, invest funds. The idea of a pyramid scheme is to use new users’ money to pay other participants, followed by the destruction of all chains and the disappearance of the system.
How to get your BTC back?
It is often impossible to restore the balance if scammers have stolen Bitcoin. However, it is worth trying to get your digital funds back. The main thing is to react quickly to the situation.
Do not panic
It is necessary to keep a cool mind. A timely reaction is a chance to rectify the situation. The first thing to do is to contact the administration of the service from which the cryptoassets were stolen. If it’s an exchange, they can freeze funds and help trace the transaction. Some trading platforms use mandatory identity verification. Then it is possible to track down the intruder. However, his personal data will be disclosed only in court.
It is necessary to promptly save the “traces” of the criminals – make screenshots of the site, correspondence. The more information is recorded, the higher the chance of recovering funds. The saved data is used to find the culprit. If the case goes to court, they will serve as evidence of theft.
Tracking the transaction and the thief’s wallet
Blockchain technology allows transactions to be viewed in the public domain. Special reviewers help track transactions and the movement of funds. The site has information about transactions made with a particular Bitcoin address. The observer tracks the balance and outgoing transactions made with the addresses. However, there is a chance that this will not help find the thief’s wallet.
Filing a lawsuit
Before going to court, you should try to find out who stole the bitcoins. The sequence is as follows:
• Record the information.
• Change passwords and freeze accounts.
• Contact the police.
• Identify the criminal.
• File a claim with the court.
• How to protect yourself from hacking
Finding a cybercriminal is a difficult problem. It is desirable to protect yourself in time and prevent such a situation.
Combined storage of digital assets
Keeping all cryptocurrency in one place is wrong. This increases the risk of theft. To protect your investments, you need to keep them in different places. It is not recommended to keep large amounts of funds in an exchange account. Distribute digital assets among hot and cold wallets. Some are more convenient for daily transactions, but with constant access to the network, while others are offline and less vulnerable.
Choosing a storage method
Characteristics of wallet types:
• Online services. This type includes accounts within exchanges. Such wallets are convenient for easy access to cryptocurrencies. However, the service itself can be attacked or hacked by fraudsters. It is better to keep small amounts in online wallets and use them for trading.
• Mobile and desktop versions. The protection of these services is higher because the private keys are contained on the user’s device. However, connecting to the network is always associated with the risk of hacking.
• Hardware wallets. Offline storage resembles a flash drive. The wallet is protected by a password and a passphrase. Significant amounts of money are recommended to keep on hardware devices.
• Paper wallets. Data is stored offline. Entries are made on paper. It is important not to lose the printed data. Users sometimes store keys in safe deposit boxes. Insurance. Often there are no guarantees for the compensation of possible losses. Some trading platforms insure crypto-account holders. In the case of theft of funds, users receive full compensation. It is necessary to read the documentation of the exchange to understand how the insurance works. A number of foreign companies also protect crypto-assets. Insurance covers losses in case of coin theft and even bankruptcy of the trading exchange. For many traders, the protection is unaffordable due to the high price of the service.
Recovering cryptoassets or getting monetary compensation in case of fraudulent actions is a long and complicated procedure. Following simple rules allows you to save your savings:
• Record suspicious transactions.
• Check links when you click on them.
• Protect your computer with antivirus.
On the legislative side, the regulation of the cryptosphere in Russia is not yet developed. The return of digital assets can be difficult.
When making transactions with cryptocurrencies, you should remain vigilant. If a crime is suspected, it is necessary to contact the administration of the trading platform and try to promptly stop the actions of the thieves.