What to do in case of theft of your bitcoins or other cryptocurrencies?
Recovering cryptocurrencies that have been stolen can be difficult, but there are still some solutions. We will explain everything to you.
If you’ve invested in bitcoin, ether, or any other cryptocurrency, you should be aware of two risks: your investments are a target for criminals, and recovering your assets can be difficult if they succeed. Indeed, the rise of cryptocurrency has coincided with an increase in many types of thefts and scams. In August, fraudsters stole $610 million in cryptocurrencies from the Chinese platform Poly Network, making it one of the largest heists ever. The coins were rarely returned by the pirates.
Mt. Gox, a Japanese bitcoin exchange, filed for bankruptcy in 2014 after thieves stole $450 million from it.
More recently, cryptocurrency exchange BitMart revealed that cybercriminals had robbed it of the equivalent of $150 million following a “large-scale security breach” stemming from the theft of private keys. Withdrawals have been temporarily suspended.
This year, $1.17 billion in cryptocurrency was stolen.
People who were known to have a lot of cryptocurrency were also targeted. Last month, police in Hamilton, Ontario, announced the arrest of a teenager in connection with the theft of C$46 million ($36.5 million) in bitcoin.
According to the authorities, this is the largest known heist done by a single person. The victim was the victim of a SIM swapping attack, in which criminals convinced phone company staff to duplicate their target’s phone number, allowing them to intercept two-factor authorization requests for secure services and thereby get access to their accounts.
In connection with the case, authorities have recovered about C$7 million ($5.6 million) in bitcoin. Losses from breaches, thefts, frauds, and other cryptocurrency misappropriations totaled $681 million in the first seven months of the year, according to CipherTrace. They will lose $1.17 billion at this rate, which is less than the $1.9 billion they lost in 2020.
Even if you keep your digital currencies on a well-known platform, it may be tough to get your money back. Coinbase, one of the most popular cryptocurrency exchanges, implemented live phone assistance after getting thousands of complaints about its customer service, which reportedly did not ease the mind.
Coinbase claims to have “crime insurance” that protects a percentage of the digital assets housed in its storage systems from theft, including data breaches, according to its website.
Furthermore, the company has begun testing a new subscription service that would allow clients to buy, sell, and convert digital currencies without incurring transaction costs. It also provides “priority phone help” and additional account protection. Of course, it won’t matter if someone hacks the software and sometimes the hardware used to store cryptocurrency. No one is responsible since these digital currencies are decentralized.
What could be more frustrating than having your money taken from you? Observe money moving across the blockchain without having the ability to act. “Your stolen monies are visible to anyone, but there is no way to recover them,” says Don Pezet, co-founder of ITProTV. “It’s like your car was stolen and parked right in front of your house.”
The ideal strategy is to take all possible precautions against theft. In what way? By shifting as much of your money to “cold” wallets that are not connected to the Internet as possible. When it comes to the funds you should leave in “hot” online wallets, keep them as safe as possible. And if by chance something serious should happen, here are some tips from the experts we consulted.
Save what you can.
Transfer any remaining funds from your hijacked wallet. Delete the wallet and replace it with a fresh one. According to ZeroFox researcher Andrew Gunn, any passwords associated with the hacked account should be changed as soon as feasible. Change your email account as well. If you believe the device you used to access your account was also compromised, format it or, better yet, cease using it.
Please contact customer support.
You are more likely to receive assistance if the bitcoin platform you utilize is well-known. Depending on the flight’s progress, the provider may be able to freeze the cash if it acts quickly enough. However, keep in mind that many exchangers are not obligated to assist you. Some are, in fact, based in nations where cryptocurrencies are unregulated. Furthermore, several countries do not recognize cryptocurrencies as assets, thus reducing the odds of receiving assistance from authorities.
Theft should be reported.
Although a lawsuit is unlikely to aid in the recovery of your stolen cryptocurrencies, an official trail can be used in an insurance claim or a potential lawsuit. Having proof that you took all reasonable steps to prevent the theft will provide credibility to whatever claim you make. Companies that specialize in bitcoin tracing have been able to retrieve funds in some situations.
In the case of the Colonial Pipeline ransomware assault in the United States, for example, the FBI was able to recover roughly 2.3 million dollars out of the 4.4 million paid in bitcoins as ransom with the help of experts. However, the authorities are unlikely to go to such lengths for a person…