"Know your enemy and know yourself, and you can fight a hundred battles without disaster." - Sun Tzu
Understanding the methods attackers use to drain cryptocurrency wallets is crucial for safeguarding your assets. Here are my subjective top eight wallet drain attack vectors:
1. Classic Phishing :
This is the most common type of attack where a phishing website tricks you into signing a malicious transaction. If your wallet app has an embedded transaction simulator, it can help you verify the legitimacy of the transaction before you confirm it.
2. Phishing with Zero Transfer:
In this sophisticated phishing attack(drainer), users are tricked into signing a transaction using a malicious contract similar to the Permit2 signing mechanism used in services like CowSwap. Transaction simulators cannot detect token transfer. To avoid falling victim, always verify what you are signing and use wallets that accurately display the approval information.
3. DNS Hijacking:
In this attack, the legitimate website is replaced with a fake one through DNS hijacking. When you interact with this fake site, you end up interacting with a malicious contract. Using a wallet that issues warnings about new contracts, even for frequently visited sites, can help mitigate this risk. Always check why the contract is flagged as new.
4. Seed Phrase Scam:
This classic scam involves an attacker posing as customer support and convincing you to enter your seed phrase. While many people are now aware of this trick, it remains a potential threat. Never share your seed phrase with anyone. Another variation of the seed phrase scam involves downloading a fake wallet app that asks for your seed phrase. Always download wallet apps from official sources to avoid this trap.
5. Address poisoning:
In this attack, the attacker sends a transaction to your wallet from an address that closely resembles one of your frequently used addresses. Do not copy-paste address from past transactions and use address book.
6. Targeted Malware:
In this type of attack, malware is delivered through seemingly harmless files like Microsoft Office documents. When you open these files, malicious code executes and steals your hot wallet seeds. Using a cold wallet can mitigate this risk.
7. Fake Extension or Trojan Malware:
Similar to fake apps, malicious browser extensions or trojans can alter your clipboard or transactions, directing funds to the attacker. To avoid this, use a hardware wallet and verify that the contract address shown on your computer matches the one displayed on your hardware wallet.
8. Low Entropy Seed Generation:
Some wallet apps might use a vulnerable random number generator to create seeds, making them easy to crack later. Mitigate this by using well-established open-source wallets, and consider adding an additional passphrase to increase security.