Last summer, an anonymous hacker made headlines for stealing $600 million in crypto from Poly Network. It was the biggest crypto theft in history.
Poly Network is a decentralized platform that connects different types of blockchains so they can work together. Then the hackers surprised everyone even more when they gave the money back.
Months later, hackers stole $150 million from another crypto exchange network. The hackers used private keys to steal funds from two “hot wallets.”
Crypto heists are nothing new, but it’s concerning how they seem to be increasing in frequency and size. So if you invest in cryptocurrencies, how can you keep your digital assets safe?
Where are these crypto heists happening?
According to experts, crypto heists are most common among centralized exchanges and decentralized finance networks. In particular, centralized exchanges are a frequent target for crypto heists due to their use of “hot wallets.”
“Hot wallets” are digital wallets that are connected to the internet. This accessibility is more convenient for users but also puts them at greater risk of being hacked. Decentralized finance networks are a newer target for hackers.
The majority of these hacks occur because of a vulnerability in the system. The crypto industry has grown rapidly and largely relies on open source technology, which puts them at higher risk.
Just because a crypto network is hacked doesn’t necessarily mean you’ll lose all of your money. Some networks will cover any stolen assets, but there are no guarantees.
Once the cryptocurrency is stolen, it could be gone forever. And some crypto networks may not have the insurance coverage to fully compensate users for large-scale losses.
How to protect yourself from a crypto heist
If you’re a cryptocurrency holder, you want to do everything you can to keep your assets safe. And while there’s no foolproof way to avoid cybercrime entirely, there are ways you can protect yourself.
Here are a few best practices to keep in mind:
- Choose a reputable network: If you’re considering investing in crypto, do your research before settling on a network. Look for a reputable company that doesn’t have a history of crypto attacks. And check to see what kind of cybersecurity measures that company has in place.
- Enable multi-factor authentication: Enabling multi-factor authentication is one of the best ways to protect yourself. It’s a good idea to use an offline token generator like Google Authenticator.
- Require approval for withdrawals: You should require approval for all crypto withdrawals. And it’s a good idea to whitelist certain addresses so only specific contacts can receive your crypto funds.
- Avoid discussing your crypto holdings: Avoid discussing your crypto holdings in public forums. Limiting your public exposure can help keep your assets safe.
- Use a hardware wallet: And finally, you might consider using a hardware wallet instead of storing your funds with a service. This method is the most secure, though you will have to take extra steps to protect and store your private keys.