As the Crypto Winter approaches, and holders of dwindling funds are grieving to spend less time opening their digital wallets, a new type of scam has emerged: cryptocurrency exchanges.
Cybercriminals can take over the underutilized exchange or wallet accounts and use them to transfer the stolen funds to private wallets. According to cybersecurity company Sift, the technology’s prevalence has increased since June, with account information being sold on Telegram and dark web discussion boards such as Dread.
“If you buy Bitcoin at $60,000 and don’t want to look at your account now, I don’t blame you,” said Brittany Allen, Sift Trust and Security Engineer. “But with people ignoring their accounts… they give scammers more opportunity to be able to test and gain access to those accounts.”
Screenshot from Dread
Cash-out scams are nothing new, with old-school scammers using options like debit cards and ATMs to withdraw money from stolen accounts. With the advancement of fraud prevention technology, cybercriminals have had to resort to other means – in this case, encryption.
Since many crypto platforms are irreversible – meaning that transactions cannot be undone – scammers use exchanges and wallets to pay each other or launder money. “This way, no one can file a complaint or dispute,” Allen said. luck.
Allen regularly monitors forums on Telegram and Dread, where cybercriminals gain access to stolen funds, hoping to find people with different skill sets who can help them move money safely to their own wallets.
In these scenarios, a fraudster with access to illegally obtained funds markets his reward on Telegram or Dread, and eventually links to a partner who has access to stolen wallets or cryptocurrency exchange accounts. Crook A sends the money to Crook B, who then transfers the money through the stolen account to a private wallet, and they’ll split the profits – assuming one doesn’t cheat the other, of course.
Allen refers to the interconnected network as the fraud economy. She said she sees hundreds of posts each month, but cautioned that many of them could be duplicates or scams themselves.
Screenshot from Telegram
Back in 2020, when travel stopped, one of the most popular means of illegal money transfer was via travel and loyalty platforms. Allen explained that the logic is that users would be less likely to verify those accounts, so cybercriminals could use them to transfer money.
Starting in June, I noticed the same dynamic pervasive in cryptocurrencies – with prices dropping freely, fewer investors were keeping a close eye on their accounts. Fraudsters have been accessing stolen accounts for long periods of time – not necessarily stealing money, but using the accounts to receive and send other illicit gains. This will be especially useful for cybercriminals who rely on large amounts of digital cash, as many digital payment platforms have daily limits on withdrawals.
The easiest solution, Allen continued, is to review the accounts regularly for irregularities, even if seeing the balance makes you sensitive. The best protection is to turn on multi-factor authentication.
“Even if it’s a fun money investment, it’s still a financial account,” she said. luck. “Treat it like all other finances and protect it.”
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