Top 7 Cybersecurity Risks for Online Crypto Payments – and How to Prevent Them

In recent times, Bitcoin, Ethereum and other cryptocurrencies have skyrocketed in popularity. But as crypto rises, so do new cybersecurity threats that users should be aware of. With cryptocurrency payments becoming more mainstream, hackers are coming up with more advanced ways to do just that.

In this article, we will cover the top 7 cybersecurity risks associated with making online cryptocurrency payments, along with tips to help prevent attacks and keep your coins safe. No matter if you are just a casual trader or handle big crypto deals, you should be aware of these risks.

Risk 1: Phishing Attacks

Accessing wallets is one of the main reasons cybercriminals use phishing. Most of the time, the attacker will send a message that seems to come from a reliable source. The message will persuade the victim to click a button to check or reset their account information.

However, the link actually leads to a fake website controlled by the attackers. If the victim enters their wallet credentials, the hackers immediately gain access and drain the account – an attack vector that secure solutions like the crypto payment widget Inqud are designed to help mitigate. Losses can range from a few hundred dollars for individual users up to millions for crypto businesses hit by phishing scams.

How to Prevent:

• Don’t click links from wallet emails or texts without carefully checking the sender’s address. Look out for slight misspellings or substitutions, which are a tip-off for a phishing attempt.
• Make sure you use two-factor authentication in both your wallet and on any exchange. It achieves this by assigning a specific code each time you log in, adding an extra check.
• Bookmark exchange and wallet sites to avoid fake phishing pages. Only log in through the bookmarked legitimate URLs.

Risk 2: Public Wi-Fi Hacks

They’re still easy for attackers to infiltrate public Wi-Fi networks at coffee shops, hotels, airports, and other places. Once connected, hackers can use all unencrypted traffic, including wallet keys if they are transferred in the open, as a target for man-in-the-middle (MITM) attacks. While you may not be transmitting private data, malware payloads can also be delivered through Wi-Fi hotspots.

Recent research indicates that at least a quarter of public Wi-Fi networks exhibit significant security vulnerabilities. Yet many travelers continue to access crypto wallets and exchange accounts without protection while on the go.

How to Prevent Public Wi-Fi Hacks:

• Refrain from accessing any accounts that contain sensitive information over public Wi-Fi.
• If you must use a public network, enable your VPN app to encrypt the connection.
• Use your mobile network connection instead of an open Wi-Fi network if available. Close any apps that could expose wallet data during transactions.

Risk 3: Clipboard Hijacking Viruses

Hackers are now using cryptocurrency-targeting malware that employs clipboard hijacking techniques. These viruses lurk in the background of infected devices, monitoring whenever the user copies a wallet address.

When the infected user goes to paste the address to send a transaction, the malware swaps the copied address for one controlled by the attacker. As a result, funds get withdrawn to the hacker’s wallet instead of the intended recipient. Losses in the tens of thousands have been reported from this scam.

How to Prevent Clipboard Hijacking:

• Copy/paste whenever possible, but manually type known wallet addresses. Check that the address you pasted is correct before submitting transfers.
• Use crypto-specific antimalware software that will detect attempts to monitor the clipboard and address swapping.
• Deny app permissions on phones to access clipboards to lower the amount of background monitoring from possibly infected apps.

Risk 4: Supply Chain Attacks

Recently, cryptocurrency hackers have expanded their targeting of third-party providers that serve the blockchain ecosystem. By compromising these vendors, attackers can then infiltrate their customers in supply chain-type attacks.

An example is that hackers used the fact that malware was installed on a popular crypto tax software provider. In total, the group took $200 million from across the company’s encrypted accounts and wallet links.

How to Prevent Supply Chain Attacks:

• Conduct extensive due diligence on the cyber practices of any third-party crypto software vendors before sharing access credentials.
• Protect the link between your wallet and your accounting platform by only allowing read-only access with tokens.
• Always monitor your account carefully using blockchain explorers when you use third-party tools. If you see a transaction you don’t recognize, inform your bank right away.

Risk 5: SIM Swapping

If you only use SMS verification for your cryptocurrency, SIM swapping could lead to great losses. Hackers may persuade mobile employees to move the target’s number to a SIM card that hackers can use.

With access to the victim’s incoming 2FA verification messages or password reset texts, the criminals can drain accounts. These SIM swap attacks have resulted in reported losses of up to $1 million per incident for high-net-worth traders or dealers.

How to Prevent SIM Swapping:

• Don’t use SMS as the sole 2FA provider for any wallet or exchange login. Instead, go for an authenticator app or hardware key.
• Establish account alerts that notify you when there are login attempts or transaction activity — so a fraudster will be caught quickly.
• When calling mobile provider support, do passphrase authentication to authenticate identity over the phone. Make changes in person when possible.

Risk 6: Cryptojacking Malware

The number of computers and phones infected with cryptojacking malware that secretly uses the device’s computing power and electricity to mine cryptocurrencies is on the rise. Although not as obvious a threat as stolen wallet funds, cryptojacking can still result in hardware degradation, overheating damage, and skyrocketing power bills if left unchecked.

Most infections occur after visiting compromised websites, through downloaded files, or in bundled software installers. Users may be unaware that cryptojackers now run stealthily in the background so as not to set off antivirus alerts.

How to Prevent Cryptojacking:

• Avoid downloading programs from unofficial sources. Stick to trusted app stores and publishers.
• Run scans with updated antimalware tools that check for stealth cryptojackers. They can detect and remove most mining malware.
• Watch both your CPU and internet traffic levels, as they may suggest that you have cryptojacking without knowing. Start over with the scan or reboot the system if you see high loads and can’t explain them.

Risk 7: Insecure APIs and Data Leaks

A number of cases have appeared where cryptocurrency companies accidentally made their customer information public due to API or server problems. Exposure from these leaks can result in users falling victim to phishing, SIM swapping and more account takeovers.

For example, a top crypto wallet provider accidentally left an internal API database unprotected. It contained detailed transaction records combined with personal information on thousands of users. This data availability makes cryptocurrency owners prime targets.

How to Prevent API/Data Leaks:

• Choose crypto providers that use confidential computing techniques for their critical systems, such as transaction processing APIs. This protects data even if servers get compromised.
• Don’t give personal details like phone numbers or emails to companies that don’t need them. If possible, use an alias to dissociate wallets from your identity.
• Even with precautions, always check the activity in your account. Make sure to be alert for any transactions that you didn’t make.

Conclusion

According to this article, cryptocurrency holders are exposed to a wide variety of cyber threats aimed at separating them from their digital assets.

You should also use safe devices, turn on account defense, pick well-known platforms, and rely on hardware wallets to safely keep your significant cryptocurrencies. With the crypto market growing, users must educate themselves on new attack tactics and layer up their security if they hope to stay one step ahead of hackers.

Knowing what the most common threats to online crypto payments are will allow traders and businesses to implement strategies that reduce the risk of their crypto transactions while still enjoying the conveniences of blockchain-powered transactions. The best way to unlock the benefits of decentralized money transmission safely is to be aware of and proactive about security.