Crypto has been under speculation for so many years regarding its safety and security as it is not a tangible asset. Later as it rose into popularity since the market value sped up and people started to view it as a form of investment.
Cryptocurrencies are encrypted in blockchain technology and are decentralized. Blockchain technology is designed to be transparent and uses consensus mechanisms and cryptographic tools making them immutable. However, just like any of our physical currencies, crypto can also be stolen and is vulnerable to cyberattacks.
This article can help you know the possibilities of tracing crypto if stolen. But before that let us get to know the different ways in which crypto is prone to such thefts and the ways to protect your hard-earned crypto.
Ways Crypto Can Be Stolen
As crypto is a digital currency or asset, just like anything digital it is also prone to cyber hacks. So the most feared crypto theft is,
Hacking: Crypto is prone to hacking as it holds large amounts of assets. Hackers aim to notice any security faults in a blockchain to get access to the private keys or the funds.
Phishing scams: Some attackers trick users into sharing their private keys or seed phrases with various tactics like creating fake websites or crypto platforms.
These two are the most common cases of crypto theft but can be as creative as the scammer. Scammers or cyber thieves can manipulate users by threatening, finding out the vulnerabilities in smart contracts, or hacking the whole system and private details of the crypto holder.
How to Prevent Crypto Thefts?
Prevention is always better than risking everything. It would help you out of a whole lot of trouble.
Secured offline wallets: Choosing offline wallets to store your assets is the most secure way of protecting them. Hardware wallets store the private keys to the assets offline and in separate devices, making them inaccessible to hackers. Another way of storing the private keys offline is through cold wallets.
Securing the seed phrases: Recovering or accessing stolen or lost seed phrases can be harder than it seems. It is always advised to keep the seed phrases written on paper and store them in bank lockers or fireproof lockers.
Multi-signature wallets: These wallets require multiple signatures or authentication making it harder for hackers to access them all.
Two-factor authentication: Always secure your private information and assets with two-factor authentication for added security.
Responsible trading: Be responsible for your actions. Always rely on reputable and trustworthy platforms.
Separate email ID: Use a separate email address other than your personal email to store the wallet.
Why is Recovering Crypto Hard?
Recovering the stolen cryptocurrency is possible in theory. But it can be very stressful and tiring for many reasons when it comes to reality. Tracking the theft is hard as it is not physical and is virtual. One of the major reasons is the anonymous nature of the currency. There is no surety if the asset stays on to be crypto or traded to physical currency right after the theft. The decentralized nature of it would not let much track to follow the theft.
How to Trace the Stolen Crypto?
Confirm that the crypto is stolen before doing anything out of panic. Sometimes it can be a slight technical glitch. But be quick to deal with the issue as fast as you come to know about it.
Reporting the crime: Report the crime to cyber security or law enforcement authorities as fast as possible as they might be able to track the hacker down before it’s too late.
Changing the login details: If you can access the account, then it is better to reset the security details including the password. Enabling the account with two-factor authentication can make it even more secure.
Inform the provider: Sometimes the provider might be able to retain the account information if it is stolen.
Locate the transaction: As crypto blockchain is transparent, locating transaction history is possible. The hackers can also be located in this manner.
Get professional help: There are professional service providers who can help track the stolen assets. However, they can be expensive.
Conclusion
Recovering a theft is always devastating, whether it is tangible or intangible. Having the right safety measures and following a rightful approach can make things easier, especially the recovery. It is hard to put the available recovery measures to use. However, taking the rightful actions can be beneficial.
Preventing any kind of fraudulent acts is the easiest way to avoid losing crypto assets like keeping a cold wallet and spreading out the investments on multiple wallets.