Yes! Most of us have been there. You stored your valuable money in a crypto wallet when you realized something was wrong… Someone hacked into your account and you lost your valuable cryptocurrencies…
If feels bad. In fact it’s a terrible feeling, knowing that you lost all your hard-earned money in the blink of an eye. You have a 99% chance of not getting anything back ever again. Fortunately, in this guide you’ll learn all you need to not let that happen and techniques to respond to the worst case scenario. Read on.
Here’s what you’ll learn:
- Why you lost your crypto: understanding the consequences
- How do you get your crypto stolen in the first place?
- Understanding hackers: the email scam method
- What to do when you lose your funds? Techniques to get your crypto back
- Protecting your cryptocurrencies the most secure way
- Setting up your hardware wallets
If you haven’t lost crypto yet, you’re one of the smart ones that understands the risks associated with having your own bank in the form of crypto.
Turns out, most of us are too lazy or just too uninformed of the actual risks out there when it comes to storing your funds.
Because one thing is clear: with power comes responsibility and the blockchain gives you total ownership of your money. No bank can control it, no government can access it. You have total control of your crypto.
In reality though, there are thousands of un-ethical individuals out there searching for vulnerable crypto wallets that don’t care about the consequences. They are smart and will use crypto’s anonymity in their favour.
When you lose your money, you lose it forever in crypto. Because transactions are anonymous, irreversible and 100% secure. If your thief doesn’t want to give you your funds back, he won’t because he’s the one in control in those situations.
Your only choice is to find out who actually did it so that you can contact that person directly and find a solution. In later sections you’ll learn how.
Turns out that programmers and hackers working for big companies or for themselves, create tools that constantly search the internet for vulnerable wallets.
They understand crypto better than most of us on a technical level. They know the security holes. That’s why they can essentially steal funds on a massive scale. Automatically.
They don’t care about the person behind the crypto. For all they know, you may be one of those rich whales that can afford to lose all their hard-earned money in a flinch.
They use scrapers that search for private keys, mnemonic wallet seed phrases and documents containing access to your funds. And it works, here’s why:
Most of us store our crypto wallet in plain documents, unencrypted since all you need is a string of text to access a wallet.
Now because access to wallets is difficult, you need to store those keys in many places. Maybe you use google drive, dropbox or any cloud storage. You don’t want to lose access to your crypto, right?
If that’s the case, you’re at risk. Particularly apps like google drive can expose your private documents to google searches without you realizing it.
It doesn’t normally happen but it’s not uncommon to make a folder or a document accessible for outsiders. That’s when problems happen.
These hackers search for the right combination of words and find your wallet. Then they proceed to steal your funds and store them in multiple, distributed wallets to make tracking almost impossible.
They also use stronger coins such as Monero where it’s almost impossible to know who’s behind a transaction since they are always implementing new, secure encryption algorithms.
Tip: don’t store your crypto private keys or seed phrases on cloud storages. Write them on paper or keep them in an offline computer, such as a hardware wallet.
That way even if someone manages to access your computer, they won’t be able to do much since it’s offline.
There’s always a risk though. You could lose your paper wallet seed access phrase. That’s why it’s important to make multiple copies and store them in multiple places that only you know but not on the internet.
Hackers are known to use all kinds of illusion techniques to make you believe you’re accessing the right website when in reality, you’re playing on a hacked website that collects all your credentials.
The email scam method is one of the most common and extremely effective scams that hackers manage to pull out.
They will send you a realistically-looking emails that appears to be from google, facebook, amazon or any big company asking you to reset your password because someone “may have accessed your account”.
In this case, that information is completely false. None has accessed your account and their only purpose is to make you click on a link that takes you to a hacked website.
It’s basically the same design but with stealing functions in place. Picture your typical facebook login page. It looks identical, even the animations and colors are exactly the same.
The only difference is that their input password will send your password to their servers, stealing your credentials as you type.
Then they connect to your account, access your private files and get your crypto keys to empty your wallet for their profit in seconds.
So if you get a suspicious email asking you to reset your password or do any action in which you would have to login: be suspicious. Check the sender email and the website domain name.
If the sender address doesn’t look like it was sent from facebook or any of those companies, be wary and don’t do anything. Instead, you can go directly to the website and reset your password on your own.
The link they provide you to reset your password will always send you to a fake website with a different domain name that looks legit but it’s not the real thing.
First of all, don’t panic. You may feel hurt, anger and disappointment in yourself for not being smart enough to protect your earnings. That’s okay, you can express those emotions but after a moment you have to think straight.
Try to understand where you stored your private keys and seed phrases. You may have stored them online, accessible to everybody or you may have sent them to a friend. In any case, try to localise the issue and fix it.
When you lose your crypto it’s almost 100% certain that you won’t get it back unless you are some kind of hacker yourself and can identify your thief. You may have the skills to trace back the stealing transaction to a specific location and person.
If not, your best bet is to contact an agency or an expert in those situations that understands crypto. Some companies have built-in tools that track specific accounts for years.
Then, whenever they make a movement with your money, they contact crypto exchanges to show them proof and identify the stealer. In most cases it won’t work. But if you’re lucky and if you contact the right person at the right time, they may tell you where your stealer is located and his identity.
That’s possible because most crypto exchanges are forced to identify each of them users through something known as KYC (Know Your Customer) which is essentially verifying where you live, your legal documents and so on so that they can find you if something like this happens.
Now that you understand what can be done and why it happened in the first place, it’s time for you to take matters on your own hands by setting up the most secure crypto storage of them all: hardware wallets.
These types of wallets look like pen-drive devices but they are much more. They store your crypto in a secure operative system while allowing you to make transactions, send and receive money and sign documents with your addresses.
The most popular ones are Trezor and Ledger. These are companies that specialize in building robust, hacker-proof devices that can’t be hacked unless they know your credentials.
They are the best choice to store your crypto because even if you connect your wallet into an infected computer, hackers won’t be able to access your wallets. They are as secure as they can get. There’s simply no other tool for keeping your crypto more secure.
Personally, I have 3 Trezors with the same seed phrases to access the same crypto accounts in case something bad happens and one of them stops working. You can never be too sure.
That’s why I recommend you to get multiple identical hardware wallets.
After purchasing your hardware wallets from the official websites (don’t trust third parties), you’ll be able to choose a seed phrase which you’ll have to write down in a physical paper in case you need to update your hardware wallet or reset your accounts.
Those physical paper copies will have to be stored securely on a location where none can access them because anybody can read you account and make transactions if they got the keys. No matter how secure your hardware wallet is.
Because here’s the thing: hardware wallets don’t make your crypto inaccessible for others, they only keep your seed phrase in a secure environment in which only you can make transactions.
If someone accesses your seed phrase, they won’t have any restrictions when accessing your account. Because the blockchain can’t be modified to protect your keys. That’s why it’s extremely important that you store your crypto keys in papers located in secure places.
After writing down your seed phrase multiple times, you’ll be done with the setup and you’ll be able to start sending coins to all the different wallets provided in your hardware wallet.
Most of them allow almost any token to be stored inside since they only need to keep track of your private keys.
Personally I store multiple Ethereum tokens and Bitcoins in them.
In this article you learned how hackers can access your crypto accounts by using smart social-engineering techniques combined with programming and security penetration techniques.
These are smart people. They know Blockchain and crypto better than most of us and they understand the consequences of everything they do.
That’s why when you deal with them, you gotta be extremely cautions to protect your funds as fast a possible.
You later saw some techniques to understand the tools at your disposal when you get your wallet keys stolen so that you can get them back in the best case scenario.
Finally, you saw how to setup a hardware wallet while understanding the clear advantages of using them for your big crypto transactions.
If you liked this article, be sure to share it with your friends and comment down below what you think can be improved for the next series of informational crypto guides.