Crypto users and projects need to be extra cautious as they enter the next bull market. They must be on the lookout for untrustworthy exchanges, insecure decentralized finance (DeFi) protocols, and evolving phishing scams. In January, hackers carried out 30 attacks and stole over $182.5 million, a significant increase of 771% compared to January 2023 and nearly 84% more than December. February was even worse, with over $380 million stolen, more than double the amount stolen in January. Notable thefts include $290 million from PlayDapp, $26 million from FixedFloat, and $9.7 million from Axie Infinity co-founder Jeff Zirlin.
To protect themselves, users need to prioritize education and awareness. Cybercrime research lead Eric Jardine from Chainalysis emphasized the importance of researching platforms and DeFi protocols before engaging with them. It is crucial to understand their security features and strategies and stay updated on any enhancements they make.
Phishing scams have been a significant issue, with over 324,000 crypto users falling victim to them in 2023, resulting in approximately $295 million in losses. Scam Sniffer analysis revealed that social media platforms are the most common sources of scam links, often found in advertisements. Beosin security researcher Pan Tao warned about phishing attacks disguised as Ethereum staking and token airdrops, which have become increasingly frequent and effective.
One example of a phishing attack involved hackers compromising MicroStrategy’s X account and stealing at least $440,000 through a scam token airdrop. The attackers directed users to a fake website that closely resembled MicroStrategy’s official site, but with a slight alteration in the URL. To avoid falling for scams, users should verify website URLs from multiple sources and fully understand the purpose of a contract before signing a transaction.
Another critical aspect of safety is choosing a secure centralized exchange (CEX). Tao recommended selecting an exchange that is licensed or at least publishes proof of reserves regularly. It should also have no withdrawal issues, high withdrawal fees, and offer timely customer support with clear responses.
When it comes to DeFi protocols, Jardine highlighted the importance of addressing vulnerabilities on and off the blockchain. On-chain vulnerabilities, particularly in smart contracts, were responsible for most DeFi hacking activities in 2023. However, compromised private keys became a more significant factor in the second half of the year. Projects should establish systems to monitor on-chain activity for potential vulnerabilities and consider utilizing products that can alert and respond to cyberattacks. Jardine noted that improved security practices have led to a 64% decrease in losses from protocol hacks, amounting to $1.1 billion in 2023.
In conclusion, crypto users and projects must prioritize education, research, and awareness to protect themselves from the rising threats in the crypto space. By staying vigilant and taking necessary precautions, they can navigate the bull market with greater security.