The crypto market is a place where investors can face threats from hackers. In addition to the most common types of cyber-attacks such as DDOS, Phishing, ransomware, malware, spyware, DNS, and spoofing, there are new ways to intercept crypto investors. This article discusses dusting attacks and shares some insights about preventing them.
What is a Crypto Dusting Attack?
A crypto dusting attack is a phenomenon where a small amount of cryptocurrencies is sent to thousands or hundreds of wallet addresses. The smallest quantities of these cryptocurrencies are called dust.
The central idea behind this type of attack is to unmask or de-anonymize the receiving wallet addresses. The dust has become a common phenomenon on various blockchains such as Bitcoin, Litecoin, BCH, and Doge in addition to other public networks.
Working Mechanism of Dusting Attacks
In most cases, dusting attacks are directed toward whale addresses, HNW investors, commercial wallets, and other big bag holders. The main purpose of dusting attacks is to find out the real identification of these wallets. Big wallet accounts also face a threat from phishing and extortion methods.
Investors who hold massive amounts of cryptocurrencies in their wallets may also face a physical threat or deal with bad situations such as the kidnapping of a family member for ransom demands.
On the other hand, regulators or intelligence agencies may also perform a dusting attack to find the real identification of a given person or group. However, law enforcement agencies may be tracing illegal activities such as drug mafia, gang members, or other forms of contraband.
Sometimes, blockchain analysis firms perform mass dusting to study the contents of big wallet holders for academic purposes. Developers may perform mass dusting as a stress test. It allows them to check the processing speed or bandwidth of a blockchain protocol.
Another way to use dusting is increasing the anonymity. Criminal enterprises may use dusting attacks to spread their wallet reserves across various addresses to evade government investigators.
There is also a question about the level of traceability using dusting as a method. It all depends on the skills, technology, and reach of a given entity that determines its ability to collect information using this method.
How to Avoid Dusting Attacks?
Here are some of the best methods to avoid dusting attacks:
Using Hierarchical-deterministic or HD wallets. These wallets can generate new addresses with every transaction.
Some digital wallets come with a UTXO or unspent transaction outputs marking. It means that the dust coins remain static in the wallet and as long as the investor does not utilize them, they can remain anonymous.
Another great way to avoid dusting attacks is using Virtual Private Network or VPN in addition to other options such as Tor.
Can Dusting Attacks Steal Cryptocurrencies?
Dusting attacks are mostly used for identifying the real person or ownership of a given cryptocurrency wallet. In most cases, attackers take advantage of the fact that investors do not notice the tiniest fraction of cryptocurrencies received in their wallets.
However, dust attacks are not used for stealing wallet contents. The attackers are after tracing the social activities of their victims and collecting their data and other information.
Are Dust Attacks Scam?
NFTs and DeFi tokens that are created by malicious actors can threaten the safety and security of a cryptocurrency investor. Some of these projects may pose as fake airdrops, faucets, or giveaways. Crypto investors may be tempted to connect their wallets with these scam accounts to collect the free ‘giveaways’.
In this manner, hackers can launch a phishing attack on unsuspecting investors. With this point of interception, hackers can add spiked code on smart contracts. Top crypto wallets such as MetaMask and Trust Wallets have suffered from such attacks since they are browser-based.
There are some instances where investors receive a transaction confirmation message containing a link after receiving dust. If the investors click on the link they can get hacked. Dust attacks have affected various cryptocurrency enterprises such as Binance and Samourai Wallet.
The best course of action is to take preventive measures, learn about various types of dust attacks, and talk to the local service provider regarding preventive methods.