In the world of cryptocurrency, asset security is always a sword of Damocles hanging over the heads of users. Limited by the threshold of on-chain fund tracking, when victims are unfortunately stolen, they often find it difficult to understand the complex on-chain transactions. Faced with a series of seemingly random characters and numbers, they cannot see the hidden flow of funds behind them. Therefore, many victims are at a loss after their funds are stolen, and even passively give up. This wrong handling method will not only miss the best opportunity to recover losses, but also lead to secondary losses of funds.
This article will explore how an ordinary Web3 user can minimize losses after their cryptocurrency is stolen, and use real cases to warn users that it is not advisable to have a bad attitude after being stolen.
Transfer of remaining assets
The victim must first accept the fact that the theft has occurred and face the next "challenge" with a positive attitude. The victim should immediately transfer the remaining cryptocurrency assets (tokens, NFTs, asset certificates, etc.) in the wallet to a new, secure wallet address. The purpose of this step is to put the remaining assets out of reach of criminals to prevent further losses.
A real case study is used to illustrate the necessity of timely transfer of remaining assets after theft. The victim in this case intended to participate in the 14-day lock-up and pledge of the Moonbeam project to obtain extremely high annualized POS returns, but he downloaded a fake wallet, which put his funds at risk of being stolen after unlocking. With the help of the Bitrace team, the victim successfully beat the hacker and recovered most of the losses. Fortunately, he did not take Bitrace's kind reminder to heart.
The assistant reminds the victim to transfer the NFT in the wallet that may be used as a voucher for the project's future airdrop
In May of the same year, the decentralized trading platform Hashflow announced the token economic model, saying that it would airdrop 6.75% of the total tokens to NFT holders (the NFT mentioned in the chat screenshot) and early users. That night, the victim contacted Bitrace again and said that the hacker had transferred and successfully received the airdrop rights of more than 20K $HFT to 38 addresses under his wallet. According to the opening price of $HFT on Binance at that time, the victim further lost about 640,000 yuan due to failure to transfer the remaining assets in the stolen wallet in time. It can be seen that it is very important to correctly grasp the stop-loss operation after the theft.
Revoke risk authorization in time
When operating on-chain, smart contracts and decentralized applications (DApps) often require users to authorize certain operating permissions. After the theft, the victim should immediately revoke the unreliable smart contract or DApp's access to their wallet. This can be done by visiting the relevant blockchain browser and using the "revoke" function; you can also visit the revoke.cash webpage to cancel the risk authorization.
Take the address 0x17.....3487 as an example. The victim approved the phishing link and had nearly 1,600 ETH worth of token assets stolen. Unexpectedly, one day later, due to the failure to revoke the authorization to the malicious contract in time, the victim had another 158 Ethereum voucher assets (worth about 4 million RMB) stolen. However, this was an unnecessary loss that could have been avoided by revoking the authorization in time.
It can be seen that it is crucial to revoke risk authorization as soon as possible after funds are stolen, because this action can immediately cut off any unauthorized third party or malicious smart contractâs access to the remaining funds in the victimâs wallet, preventing these authorizations from being used to execute further transfers of assets, thereby avoiding further losses.
Seek help from a security company
On-chain tracking has certain technical barriers, which is an insurmountable obstacle for most non-professional users. Therefore, victims can seek blockchain analysis services from security companies as soon as possible. Professional blockchain security companies have the ability to track and analyze on-chain transactions.
UwU was attacked twice.
Based on the relevant transaction information and wallet addresses provided by the victim, security experts can use advanced analytical tools to track the flow of stolen funds and may help identify and track related criminal entities to further increase the possibility of recovering losses. In 2023, Bitrace intercepted and recovered more than $100 million worth of crypto funds for victims including CEX, DeFi protocols, and ordinary investors.
Final Thoughts
Every unfortunate incident will bring us one step closer to a safer Web3 digital world. Although the loss cannot be eliminated, it can be reduced to a certain extent through correct actions and strategies. Learn from the misfortune, improve personal security awareness, learn to safely manage digital assets (such as using hardware wallets to store funds), be wary of any form of phishing attacks, and understand the latest network threats and protection measures to prevent theft from happening again.
