Three Ways To Prevent Account Takeover of Your Cryptocurrency Accounts

Account takeover, where hackers gain access to your cryptocurrency accounts and steal your funds, has unfortunately become quite common recently.

This type of theft is often conducted by hijacking the email address and password that you use to login to your cryptocurrency exchange or wallet provider’s website. 

When it comes to managing your cryptocurrency, security should be your number one priority. For that reason, you should take precautions to ensure that your account information doesn’t fall into the wrong hands. 

Luckily, there are several steps you can take to prevent this type of hostile account takeover of your cryptocurrency accounts.

3 Ways to prevent account takeover

How do you prevent cryptocurrency account takeover? 

For crypto-enthusiasts, preventing your digital assets from falling into the wrong hands can be a tricky proposition. 

Protecting your cryptocurrency accounts from theft and account takeover has never been more important, with the value of Bitcoin and other cryptocurrencies reaching astronomical highs since 2017.

According to global crypto adoption, as of 2021, Bitcoin market cap reached over USD 1 Trillion.

The decentralized nature of cryptocurrency means that there’s no central authority to prevent account takeover, and once your tokens are gone they’re usually gone forever.

What can you do to make sure your assets are protected?

One of the most common ways people get hacked is through account takeover.

This happens when an attacker takes over your email account and gains access to your cryptocurrency exchanges or wallets.

They can do this by resetting your password using nothing more than your email address and password combination.

This can happen even if you’ve enabled two-factor authentication (2FA).

Here are three ways to prevent account takeover and keep your cryptocurrency safe from malicious hackers in this day and age.

So, let's dive right in!

1. Detect account takeover

Cryptocurrency account takeover is rare, but not impossible.

To prevent it, you can try using transaction-monitoring software to spot any unusual activity on your cryptocurrency accounts. 

If your alert system indicates a potential breach, go ahead and change your passwords and enable two-factor authentication if possible—both of which are necessary if you want to stop account takeover.

The first step to stopping an account takeover is to detect what type of ATO fraud has attacked you.

Type 1 — Phishing: Phishing is a form of account takeover that involves fraudsters using deceptive and misleading emails to trick people into revealing their online account credentials.

Fraudsters often target popular websites and services that members use every day, making it all too easy for accounts to be hijacked.

Type 2 — Malware: Malware is software designed specifically to damage or disable computers or computer systems, through tasks such as gathering data, corrupting files, and spreading viruses.

The primary way fraudsters use malware in account takeover attacks is by installing malicious software on victims’ computers via email attachments or links.

Once a computer has been infected with malware, account information stored on your hard drive can be collected and passed along directly to hackers.

Type 3 — Credential Stuffing: Credential stuffing refers to an automated process used by fraudsters to attack numerous online accounts at once.

It works like this: fraudsters collect personal information from leaked databases and then enter that info into username/password fields across multiple sites until they find one that works. 

This technique allows them to access several accounts at once, quickly racking up charges and causing maximum financial damage in a short amount of time.

Type 4 — SIM swapping targeted attacks: A SIM swap occurs when someone obtains control over your mobile phone number without permission.

If someone steals your phone number, they have access to everything associated with that number.

This includes any text messages sent between you and financial institutions, two-factor authentication codes, and any secondary passwords you may have set up for various accounts.

For example, if you don't receive a text message containing a code after setting up two-factor authentication on your bank account (like Verified by Visa), there's a good chance someone took over your phone number without permission. 

2. Stop and protect against cryptojacking

As far as cryptocurrency security goes, account takeover or cryptojacking is one of, if not, its biggest risks. It is 

With an active account takeover (or ATO), an attacker can hijack your cryptocurrency wallet and use it to make their own transactions, sending your funds to their wallet instead.

Fortunately, there are a few steps or account takeover protection that you can take to keep yourself safe from ATO attacks.

What can you do to stop cryptocurrency account takeover in its tracks? Behavioral-based bot mitigation can be applied to stop account takeover attacks in their tracks.

If someone is attempting to log into your account and they’re doing something that doesn't match up with your normal login behavior, behavioral-based bot mitigation will deny them access. 

The way that this works is that every time you log into your cryptocurrency wallet, they will record what action you took after logging in.

Whether it was withdrawing coins or making another transaction—and then compare that data with future attempts at logging in.

If someone logs into your cryptocurrency wallet and does something different than usual, then you'll know that something fishy is going on.

This could be something like immediately withdrawing all of your coins or using them for an unusual transaction amount,

By creating scenarios for how a typical account takeover might happen, you can create your own timeline for what happens when.

This could help you identify whether or not something is off about any new requests made by anyone who has administrative control over your cryptocurrency wallet.

And by identifying that something isn't right, you'll be able to shut down an attack before it has a chance to go anywhere.

Two-factor authentication, or 2FA, adds an extra layer of protection to your cryptocurrency exchange accounts by requiring a second form of verification whenever you attempt to log in.

While having strong passwords is important, 2FA helps prevent attackers from accessing your cryptocurrency accounts even if they manage to get hold of your password somehow.

In most cases, 2FA takes place through email verification.

When you try to log into your cryptocurrency account for the first time after enabling 2FA, you'll receive a unique code via email.

You must enter this code along with your password before gaining access.

3. Prevent account takeover

Prevention is an important part of any security plan, whether you’re trying to keep out a would-be hacker or keep your cryptocurrency account safe from attack.

While there are no fail-safe methods for preventing ATO, here are three things you can do to help reduce your risk.

Select difficult password combinations--Your username and password should both be difficult for anyone but you to guess; avoid things like predictable patterns like password123 (you may have heard that one before).

As already mentioned, the two-factor authentication method adds an extra layer of protection by requiring users to enter a second code in addition to their password in order access their account.

However, you can do much more than this to preeminently safeguard yourself against active ATO attacks.

Don’t Use Public Wi-Fi--Every time you use public Wi-Fi, there’s a chance that someone else could be able to intercept your connection and access your data.

When you’re looking for a secure connection, try not to use public Wi-Fi networks.

Use VPN--Downloading a VPN is an easy way to help secure your data.

Since you’ll be using a Virtual Private Network that acts as an additional layer of protection between you and your destination, it should cut down on account takeover risks as well.

Use a Password Manager--Use a password manager such as LastPass, 1Password, or Dashlane.

These let you generate and store complex passwords for every online account.

You only need to remember one password - your master password for your chosen manager - and all of your other credentials are stored in an encrypted vault that you can access on any device.

This means that if someone steals your wallet, they won't have immediate access to all of your accounts.

So take time today to lock down each of your important accounts with unique and strong passwords by using a password manager!

Be responsible towards clients' personal information--If you’re going to collect personal information from your customers and clients, you have a responsibility to protect that data.

And that means protecting it from would-be hackers and scammers too.

The first step in doing so is by complying with California’s CPRA, which says you can only ask for information deemed reasonably necessary. 

For example, if all you want is an email address for your customer database, don’t ask for last name or birth date. 

Conclusion

Follow these guidelines for prevention, detection and recovery if you ever face an account takeover.

You can’t do much about ransomware or malicious apps on your phone that want to swipe your data and money, but there are precautions you can take on your end.

Keep your passwords and access information safe; it might save you a few bucks and some anxiety when you have to recover from an Account Takeover or attempted crypto jacking.