With the rising price of Bitcoin and crypto’s popularity, keeping your digital assets secure has never been more important.
The rise of crypto means that the number of scams is skyrocketing.
One of the most common and dangerous scams is fake crypto wallets.
Used by cybercriminals to unlock your personal information and get access to your private keys, these fake crypto wallets can be very convincing to the unsuspecting user.
Staying informed and up-to-date about scammers’ techniques is crucial to protecting your crypto.
In this post, we will share how to spot a fake wallet, what techniques criminals use to fool crypto investors and give you solutions to protect yourself and your digital assets.
Crypto losses from scams and hackings totaled US$3.9 billion in 2022.
Are There Fake Bitcoin Wallets?
Sadly, fake Bitcoin wallets have become a popular “tool” for scammers and hackers in the crypto world.
These wallets are masterly designed to look just like the real thing. They appear legitimate, mimicking logos, websites, email addresses, and other information. But, they are far from the real deal, as they are created to steal your crypto the second you access them.
There are a few popular cases where fake crypto wallet scams have drained millions from investors.
One example that stands out is a scheme that managed to steal almost $15 million worth of BTC from users.
The crypto wallet Electrum has fallen victim to phishing schemes since 2018, and in 2020 tricked two separate users into losing 1,400 BTC (worth $14,595,000 at the time), and 36.5 BTC (worth $380,512 at the time) respectively.
Another example of a fake crypto wallet was on the Google Play Store in the form of an app.
The app mimicked real wallet applications, causing users to believe that they were downloading legitimate wallet apps.
This mishap caused countless unsuspecting user to download and enter their private keys into the application.
✴️Pro Tip: Always download programs or apps from official websites & sources.
A fake Trezor app was also on the Apple App Store, that led to over $600,000 worth of Bitcoin being stolen.
The app looked remarkably similar to the real Trezor app, so users didn’t think twice before downloading it and following the prompts to enter their private information.
This created a big scandal for the hardware wallet that prides itself as being one of the best hardware wallets available, and also for iOS users who questioned Apple’s review processes.
The Most Common Fake Crypto Wallet Scams
There are plenty of tricks that cybercriminals use to scam you out of your crypto. Here are three common ways that hackers use fake crypto wallets to get your private keys and steal your cryptocurrency.
1️⃣Fake Wallet Apps
For a professional scammer to make a fake crypto wallet look legitimate is unfortunately easier than you might think.
They are created to look exactly like the official versions and are even distributed through the Apple App Store and Google Play Store.
Without knowing, users download these fake versions, enter their private info, and transfer crypto directly to the scammer’s address.
2️⃣Phishing Scams
Another common method used by criminals is phishing scams.
Scammers commonly use this method through emails or messages that appear to be from a real crypto wallet provider.
These messages often include a link to a fake site, urging you to enter your username, password, PIN, and even private keys.
Once you enter this information, the scam artist gains all they need to access your wallet through the real wallet’s interface and drain your account of all your crypto.
3️⃣Malware-Infected Wallets
Cybercriminals might use advanced techniques to infect your wallet’s apps with hidden malware.
These viruses aim to encode your private keys and transfer crypto funds without you even knowing!
This type of scam can happen by downloading a fraudulent crypto wallet through an unofficial app store or website or accepting an update prompt through an email or message.
Using a backup metal crypto wallet for your seed phrase recovery is crucial in protecting yourself.
It is the only way to regain control of your assets before the scammers take your investments.
The Dangers of Fake Crypto Wallet Apps
➡️Financial Loss: The biggest compromise with falling victim to a fake crypto app is being robbed of all of your crypto. Scammers can quickly move your assets to their untraceable accounts. Then, it’s almost impossible to recover your cryptocurrency.
➡️Theft of Personal Information: Apart from taking your crypto assets, scammers will also take as much personal information from you as possible. Your info can be utilized for other crimes, such as identity theft.
Legit and Secure Bitcoin Wallets
To fully secure your Bitcoin, using a hardware cold wallet is your best option.
Hot wallets, which use software programs and are always connected to the internet, face a much higher risk of online attacks. A cold wallet, like Material Bitcoin, is completely offline and provides full security and coverage.
Since a Material crypto cold wallet is not connected to the internet, it is immune to hacks and malware. This protects your digital assets and private keys.
Material Bitcoin wallets are easy to use, with a super straightforward set-up. It is the perfect option for beginners or crypto experts who are looking for the height of privacy and security.
FAQs
What should I do if I accidentally use a fake crypto wallet?
- Once you discover that you have accidentally downloaded and used a fake crypto wallet, you should immediately change your passwords and PINS and report the incident. We advise also moving your crypto as soon as possible using your recovery phrase if need be.
Are hardware wallets safe from being faked?
- Hardware wallets from reputable manufacturers are safer than software wallets. But keep in mind that not all hardware wallets are cold wallets. A cold wallet is what will keep your private keys and information offline.
What are the risks of using a fake crypto wallet?
- The main risks include losing all of your cryptocurrency and having someone steal your personal information. Scammers can move your assets to untraceable accounts, making recovery almost impossible.
How can I protect myself from fake crypto wallets?
- To protect yourself, always use official sources for downloads and purchases. Stay informed and updated about common scams and security practices and use a cold hardware wallet for top security features.
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