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Crypto-focused malware aids hackers in stealing millions, report finds

By Gaia Lamperti

January 26, 2022

  • Blockchain
  • Chainanalysis
  • Crypto Crime
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crypto malware

When it comes to cryptocurrency theft, industry observers tend to focus on attacks against large organisations, but over the last few years, blockchain data platform Chainalysis has observed hackers using malware to steal smaller amounts of cryptocurrency from individual users. In its upcoming Malware Crypto Crime Report, the company examines how cryptocurrency-focused malware has been used by hackers to steal millions in funds.

Malware refers to malicious software that carries out harmful activity on a victim’s device, usually without their knowledge. Malware-powered crime can be as simple as stealing information or money from victims, but can also be much more complex and grand in scale. Among the malware families used to steal cryptocurrency from victims, there are Clippers, inserting new text in the user’s clipboard to replace cryptocurrency addresses with the hacker’s one; Trojans, viruses that look like a legitimate program but infiltrate victim’s computer to disrupt operations; and Cryptojackers which make unauthorised use of victim devices’ computing power to mine cryptocurrency.

The majority of malware operators receive initial victim payments at private wallet addresses, but some of them also use addresses hosted by larger services. Of that smaller group, the majority use addresses hosted by exchanges, usually high-risk exchanges that have low or no KYC (Know Your Customer) requirements.

Courtesy of Chainalysis.

“Malware-based cryptocurrency theft is difficult to investigate in part due to the large number of less sophisticated cybercriminals who can rent access to these malware families,” Chainalysis explained in a blog post on their website. “But studying how cybercriminals launder stolen cryptocurrency may be investigators’ best bet for finding those involved. Using blockchain analysis, investigators can follow the funds, find the deposit addresses cybercriminals use to cash out, and subpoena the services hosting those addresses to identify the attackers.”

The cybersecurity industry has been dealing with the issue for years, but the usage of these malicious programs to steal cryptocurrency is a quite recent advancement. which means that cybersecurity teams need new tools in their toolbox. With its research, Chainalysis gives cybersecurity teams new avenues of investigation for malware, allowing them to take advantage of blockchains’ transparency and track the movement of funds that have been stolen until they reach an address whose owner can be identified. Likewise, cryptocurrency compliance teams already well-versed in blockchain analysis must educate themselves on malware in order to ensure these threat actors aren’t taking advantage of their platforms to launder stolen cryptocurrency.

Key findings from the research:

  • The malware families sampled received 5,974 transfers from victims in 2021, up from 5,449 in 2020.
  • Cryptbot, which is used to steal cryptocurrency wallet and account credentials, was the most prolific malware strain observed, raking in almost half a million dollars in stolen Bitcoin.
  • Cryptojacking is the most prolific malware, receiving 73% of all value taken by malware types.
    • The scale of cryptojacking is likely even greater than this number reflects, as it’s harder to track than other crypto-related crime.
  • Studying how cybercriminals launder stolen cryptocurrency may be investigators’ best bet for finding those involved. Using blockchain analysis, investigators can follow the funds, find the deposit addresses cybercriminals use to cash out, and subpoena the services hosting those addresses to identify the attackers.

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