More than 56% of all cryptocurrency crimes occur in the United States

The rate of cryptocurrency attacks is increasing rapidly. 720 accounts have been compromised in all major exchanges – and many have to do with poor security settings, in particular the lack of two-factor authentication (2FA).

The international cybersecurity company Group IB has shown that the number of compromises accounts have increased by 369 percent since 2017. Data shared with Hard Fork show that an incredible third of the victims were in the United States. And one of the first 19 exchanges was hit very hard; 720 user names and passwords stolen in total.

The hack rate even mirrored the market highs when stolen password episodes increased by 689% from the January monthly average. At least five of the 19 exchanges suffered attacks that led to the loss of $ 80 million in cryptocurrency.

50 active botnets continually attack both users and exchanges, the report states. Over half of the malicious traffic comes from the United States, while the Netherlands provides 21.5%.

The botnets are fed by new members via Trojan horses, a type of malware that often masquerades as a harmless file or program. When interacting, a virus forces the machine to become part of a network of slave computers – or botnets.

Usually, computers contribute with their computing power to complete an activity – like mine, a cryptocurrency or a weak password crack. Recently, Brazil was dealing with its own Monero-mining botnet, resulting from a zero-day attack on MicroTik routers.

While the report admits that phishing attacks are still prevalent, hacking tools are becoming more sophisticated and properly tuned to the theft of cryptocurrency. Notice that attack patterns resemble high-tech bank robbery models, using modified software to drive trade – which simply are not prepared for the worst.

"Increase in the fraudulent activity and attention of hacking groups to the encryption industry, the additional functions of malicious software related to cryptocurrencies and the large amount of funds already stolen indicate that Industry is not ready to defend itself and protect its users, "said Ruslan Yusufov, Director of Special Projects of the IB Group.

These factors are only exacerbated by an apparent ignorance of the basic notions of security. Both users and exchanges do not use two-factor authentication (2FA). Even more surprising: of the 720 compromised accounts, one in five used a password of less than eight characters.

It is worth mentioning that previous studies have concluded exactly the same thing: cryptocurrency exchanges have a terrible password security that makes users vulnerable.

The report also suggests that investors pay close attention to what they publish on social media. You should never leave "traces" on social media that suggest you have any cryptocurrency – and avoid making exchange transactions on public Wi-Fi.

Now, more than ever, it's also a good idea to increase your knowledge of phishing attacks and pay attention to those who talk about cryptocurrency in public. Set a really valid password and as long as the exchanges do not solve their security, do not take too much of a specific one.

Do your research when choosing a wallet and with Satoshi Nakamoto's Bitcoin – enable 2FA on all things!

Published 6 August 2018 at 11:02 UTC

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