Hacks and scams have been present in the crypto world since day one. Now, with the increase in the market capitalization of cryptocurrencies, a noticeable surge in attacks and threats that target crypto should come as no surprise. Recently, Microsoft researchers found that there’s been a climb in techniques and malware. One in particular stood out amongst the rest. The new virus, dubbed Cryware, was revealed in a new security blog post published by Microsoft in early May. 

According to the study, Cryware is a type of data stealer that targets hot wallets (non-custodial crypto wallets). That’s because hot wallets, unlike cold wallets, are kept on a device locally. Therefore, it gives simpler access to its cryptographic keys – required for transactions. Because of that, a significant number of threats are shifting their focus to them. 

In a report by Laurie Kirk and Berman Enconado – two employers from the Microsoft 365 Defender Analysis Workforce – the company stated that due to the popularity of cryptocurrencies, the impact of Cryware attacks have become more notable. In their analysis, they were able to observe that previous campaigns that deployed ransomware are now employing Cryware to raid crypto funds straight from a targeted device. 

Before Cryware’s development, the role of cryptocurrencies during a hack or the level of an assault in which they were part of was conditional to the attacker’s overall intentions. For instance, many ransomware attacks use of crypto as a way to pay the ransom. 

Even so, in a ransomware attack, the targeted users would need to carry out the transfer themselves. On the other hand, cryptojackers – one of the most common malwares in the crypto world – try to mine cryptocurrencies on their own. Still, such a strategy is highly dependable on the capabilities and resources presented by the targeted system. 

With Cryware, attackers are able to gain access to the target’s hot wallet data and move all of their cryptocurrencies to their own wallet. To make matters worse, all blockchain transactions are final. It doesn’t matter if they’re without the user’s knowledge or agreement. Unlike other financial transactions, like credit cards, there are no known methods to protect consumers or reverse the criminal cryptocurrency transactions. 

Hackers use Regexes (regular expressions) to locate hot wallet data – like seed phrases, wallet addresses and private keys. With these patterns, Cryware is able to automate the process. Other methods to acquire wallet information are memory dumping, phishing, frauds and clipping and switching.

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