Every new technology gets its fair share of malicious operators, and despite the airtight security measures, hackers keep coming up with sophisticated methods each passing day; hence, may have fallen victim to these attacks. The meteoric rise of crypto has resulted in massive heists, particularly targeting DeFi protocols with pooled funds and personal wallets of unsuspecting crypto users.
Of course, you may have taken steps to ensure your crypto wallet isn't one of them. However, if you find out that your crypto wallet has been hacked, don't panic; there are steps you can take to remedy the situation and prevent this from happening again in the future.
How To Know If You Have Been Hacked
There are a few telltale signs that your crypto wallet has been hacked. The first is if you see unexplained transactions or withdrawals from your account. Another is if you receive strange or unsolicited messages from people you don't know. Also, if your password suddenly stops working or you can't log into your account, that's a strong indication that someone has accessed your account and changed your password.
What To Do When You Discover That You Have Been Hacked
1. Take Out The Rest and Open a New Wallet
If you still have some leftover tokens in the compromised wallet, the first thing to do is to take them all out; a single hack puts your wallet vulnerable to future assaults, and ongoing use may expose your money to greater danger. Hence, you should immediately discard that wallet address and look forward to using a new one.
Before transferring leftover tokens to a new wallet on the same device, you should conduct a malware check with the antivirus software installed on your device. If it looks like malware is present on your device, you must proceed with caution. Your antivirus program should be able to eliminate the malware, so it may be unsafe to immediately install a new "hot wallet" on the same device, as doing so in the presence of malware may transfer it to the next wallet. Hence, in that case, while looking for how to eliminate the malware, you may transfer assets to a new hot wallet on a new device.
If it is a custodial wallet service, you may not necessarily delete the account. However, you should change your passwords, and enable two-factor authentication (2FA).
2. Notify Your Wallet or Exchange Provider
If a wallet or exchange provider receives many complaints regarding hacked wallets, they'll likely adjust their service to improve security. Furthermore, your wallet or exchange provider may provide a fund recovery plan to replace your stolen crypto, so contacting them may benefit you more than you realize.
In any event, informing the authorities when your cash is looted is critical, so make sure you tell the police and provide them with any essential information so that they may conduct an investigation. In addition, many exchanges and wallet providers recommend that you inform the authorities if your money is taken, so it's always a good idea to alert both parties so that they're aware of the incident and can give assistance.
3. Get Help From Experts
After contacting the company that created your crypto wallet, you can also contact law enforcement officials if you believe it's necessary or if there's evidence of illegal activity. Again, the sooner you act, the more likely it is that this will be resolved quickly and with minimal damage to your assets and reputation.
Even if certain governments are hesitant to prosecute crypto theft cases, hacking is now a crime in practically every country. As a result, it's best to contact the police right away. They may act promptly and catch the hacker, allowing you to retrieve the stolen funds. Furthermore, hacking is becoming a more common crime, and there is a greater likelihood that the police will move decisively to bring the perpetrators to prison.
4. Create A Strong Password and Keep Your Seed Phrase Safe
After the new account has been created, choose a new password that is strong and unique. Avoid using easily guessed words or phrases. Create a new seed phrase for your wallet. This should be done offline and in a secure location.
Update any passwords or security measures associated with your old wallets, such as 2FA codes or recovery phrases. Use a different password for each account, and make sure they are all strong passwords. Suppose you're concerned about forgetting your various passwords or usernames. In that case, you may use an offline password manager, save physical backups of your information, or utilize technology that doesn't require an internet connection, like a USB drive. These are very good choices for storing seed phrases.
How To Protect Yourself From Future Hacks
Once you clearly understand what has happened, you can begin to take steps to protect yourself from future hacks. That should start by changing your passwords on all online accounts involved in the breach as explained above.
While additional security layers might sometimes make executing tasks within your wallet take a bit longer, they are critical in protecting your cash from unscrupulous parties. So, if you have a cryptocurrency wallet, make sure it has some practical security measures and utilize them whenever feasible.
Keep significant sums of cryptocurrency in a cold wallet. Cold wallets allow you to store your cryptocurrencies offline, reducing the possibility of hackers accessing and stealing your assets. Use a safe wallet to back up your wallet recovery password and follow crypto/blockchain cybersecurity best practices to avoid losing your crypto to hackers.
Prevention is better than cure; however, if you have been hacked, it is important to be aware of these security tips to ensure that you won't fall victim again. If you have never fallen victim, then you should make extra efforts to follow all necessary practices to ensure that your wallet won't be compromised.
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