As the crypto industry is growing gradually, the digital payment system is slowly transforming with lower transaction fees, quicker borderless transfers and also with no intermediaries. But, the incidences of cyber attacks are also increasing with sophisticated techniques deployed by hackers. In August 2019, one of the crypto attacks came into the picture when most of the Binance users who have the Litecoin (LTC) get duped by Litecoin dusting attack after receiving the extremely small amount of LTC from an unknown source. Similar incidence was noticed with Bitcoin owners in 2018. You may find it strange that how can the free crypto coins be strange or a form of attack? What is a crypto dusting attack? Is it a threat and needs to be mitigated? In this article, you are going to learn about crypto dusting attacks.
Crypto dusting attack takes place when an unidentified source or malicious attacker sends an extremely tiny amount (known as “crypto dust”) of cryptocurrency (generally Bitcoins or popular altcoins) to hundreds of different crypto wallet public addresses. Attackers then track the transactional activities of these wallets for the combined analysis of the number of addresses so as to identify the company or individual owner of these crypto wallets (targeting the anonymity!). Dusting attack is a kind of malicious activity which aims to break the barriers maintaining the privacy of Bitcoin and other cryptocurrencies.
Dusting attack is not a direct and immediate threat but it is the strategy to steal the heavy amount of digital assets from a huge number of digital wallets. If the red flag situation is noticed at the appropriate time and that minuscule funds are not transferred anywhere from the wallet, then the repercussions of attack can easily be mitigated. But, ignoring the small gift of free cryptos can prove to be explosive.
Phishing, crypto-jacking, ransomware and other nefarious tactics are meant for different purposes and not similar to dusting attack. Most of the attacks or scams are focussed in stealing cryptocurrency or computing power to mine assets. On the contrary, crypto dusting targets the “anonymity” to have the big game win and ultimately stealing the funds, data, addresses and also the transactional history. Other reasons for the attack could be:
The groundwork for a phishing or extortion attempt: By tracking the address of the wallets, scammers tend to uncover the identity behind a number of crypto wallet addresses and tend to make a mark for phishing attacks.
Cheap marketing gimmick: Sometimes the transfer of a small number of cryptos turns out to be the cheap marketing techniques, which are even deployed by reputed crypto exchanges at one or the other time.
Ultimately the purpose of every crypto attack is stealing the cryptos in one or the other way which must be mitigated within the time frame with a number of techniques available.
August 10, 2018, one of the reputed crypto exchanges Binance announced that fifty of the Binance-Litecoin addresses had received 0.00000546 LTC in their crypto wallets from an unknown source address. The team of Binance became aware of the dusting attack and started looking into the transaction path of source wallet. After investigation, it came into notice that more than 3,00,000 addresses were affected (LTC users majorly). The attack affected the complete network especially the Binance users with active Litecoin addresses were affected. When the investigation got completed, it turned out that one of Russian mining pool companies wanted to advertise their services to Litecoin users which were interpreted as the Binance dusting attack. But, generally, this is not the purpose in the majority of cases but few of the attacks were meant for advertisement like that of dusting attack Litecoin.
Crypto dusting attacks can easily be avoided by taking cautious measures as mentioned:
Thus crypto dusting attacks might be difficult to stop but by choosing the crypto wallets cautiously, keep track of the history of transactions and using the different addresses for transactions can be helpful in mitigating the consequences of attacks.
Blockchain technology-based cryptocurrency is almost impossible to disrupt but as the new technologies are coming up with the new techniques, scammers and hackers are leaving no stone unturned to steal the digital assets of the crypto enthusiasts. Privacy and security are two of the major concerns which are seriously discussed in the crypto community and exchanges are already working to ensure the issue- free experience to users. Dusting attacks with no direct impacts are taken care of seriously along with threats of ransomware, phishing, crypto-jacking and many others. But as the industry will grow more, the issues related to security will be addressed by the companies particularly involving in the maintenance of a secured network. Crypto space is still in the nascent stage so the investors must self educate themselves also rather than completely depending on crypto exchanges or wallet providers.
I hope crypto dusting attacks won't dust your account and even if it dusts, you might not get into the trap!