Beware of Hardware Scams That Can Drain Your Crypto Wallets

Hackers use compromised hardware devices to steal cryptocurrencies—here’s how these attacks work and how to protect yourself.

Cryptocurrency users are facing increasing threats from sophisticated hardware attacks that can drain their crypto wallets. These scams often involve malicious hardware, such as compromised USB drives or tampered hardware wallets, designed to steal funds once connected to a device that holds digital assets.

One of the most common methods is through modified hardware wallets, which are designed to look legitimate but are preloaded with malware or have their private keys compromised. Attackers will sell these wallets on third-party sites like eBay or Amazon, knowing that many users prefer hardware wallets for extra security. Once a victim uses the wallet, the attacker can access the wallet’s private keys and drain the funds. This scam targets users who may not purchase directly from verified retailers.

**Wallet drainers** are another significant threat, utilizing software or hardware to siphon crypto from wallets. These drainers often require a victim to approve a transaction, either through tricking them into connecting to a fake website or using compromised hardware. Once connected, the wallet drainer identifies the most valuable assets and executes transactions, transferring the funds to the attacker’s wallet.

In some cases, these scams are marketed through seemingly legitimate means, such as phishing emails or fake airdrop sites, luring users into connecting their wallets to malicious devices or platforms. Once the malicious hardware or contract is connected, it can rapidly drain crypto assets.

How to Protect Yourself:

1. Purchase hardware wallets only from official sources. Avoid secondhand or third-party sellers, as they are often compromised.

2. Never connect your wallet to untrusted devices or websites. Always verify the legitimacy of a website or app before engaging in any crypto transaction.

3. Use multiple wallets. Keep your primary assets in a secure cold wallet (offline) and use hot wallets only for daily transactions or smaller amounts.

4. Regularly update your wallet’s firmware to ensure that any security vulnerabilities are patched.

By staying vigilant and using trusted hardware, you can significantly reduce the risks of falling victim to these increasingly sophisticated crypto-draining scams.

photo source / Blockonome