Strategies for Dealing with Crypto Assets Theft

In the field of Crypto Assets, asset security issues have always been one of the topics users are most concerned about. Due to the complexity of on-chain fund tracing, many users often feel confused and helpless when encountering theft. Faced with a seemingly random string of characters and numbers, they find it difficult to understand the hidden flow of funds behind it. In such cases, many victims choose to respond passively, missing the best opportunity to recover losses, and even leading to more financial losses.

This article will explore how ordinary Web3 users can minimize losses after their Crypto Assets are stolen, and illustrate the importance of taking proactive actions after a theft through real-life cases.

Transfer Remaining Assets Immediately

Once a theft is discovered, the victim must first accept this fact and actively respond to the subsequent challenges. The first step is to transfer the remaining crypto assets (including tokens, NFTs, asset certificates, etc.) in the wallet to a new, secure wallet address. The purpose of this step is to place the remaining assets out of reach of the attacker, preventing further loss.

A real case can illustrate the necessity of timely transferring remaining assets. A user intended to participate in a 14-day lock-up pledge for a project to obtain high returns, but accidentally downloaded a fake wallet, putting their funds at risk of being stolen after unlocking. With the help of the security team, the user successfully acted before the hacker, recovering most of the losses.

However, the users did not fully heed the advice of the security team and failed to transfer NFTs from their wallets that could serve as airdrop credentials in the future. As a result, a few months later, when a certain decentralized trading platform announced an airdrop of tokens to NFT holders, hackers had already transferred the airdrop rights from 38 addresses under the usernames and successfully claimed them, causing an additional loss of about 640,000 RMB. This case fully illustrates the importance of properly mastering stop-loss operations after a theft.

Timely Revocation of Risk Authorization

When performing on-chain operations, smart contracts and decentralized applications (DApps) usually require users to grant certain operational permissions. After being stolen, victims should immediately revoke all suspicious smart contracts or DApps' access to their wallets. This can be done by visiting the relevant blockchain explorer and using the "revoke" function; it can also be done by directly visiting specialized revocation authorization websites.

A typical case is that a user lost nearly 1,600 ETH worth of tokens after approving a phishing link. Worse still, due to the failure to revoke the authorization for the malicious contract in time, another 158 Ethereum credential assets were stolen a day later, worth about 4 million RMB. This loss could have been avoided by timely revocation of authorization, highlighting the importance of this step.

Seeking Assistance from Professional Security Companies

For most non-professional users, on-chain tracking is a task with a high technical threshold. Therefore, victims should seek the help of professional security companies as soon as possible to conduct blockchain analysis services. These companies have the expertise to track and analyze on-chain transactions.

Security experts can use advanced analytical tools to track the flow of stolen funds based on the transaction information and wallet addresses provided by the victims, potentially helping to identify and trace related criminal entities, thereby increasing the chances of recovering losses. According to statistics, in 2023, a certain security company intercepted and recovered over 100 million dollars worth of Crypto Assets losses for victims including centralized exchanges, DeFi protocols, and ordinary investors.

Summary

Although each security incident brings losses to the victims, these experiences also drive the Web3 world to develop in a safer direction. Although it is impossible to fully compensate for the losses, through the right actions and strategies, we can reduce the extent of the losses to a certain degree.

It is crucial to learn lessons from these unfortunate events and enhance personal security awareness. Users should learn how to securely manage their digital assets, such as using hardware wallets to store funds, being vigilant against various forms of phishing attacks, and keeping up-to-date with the latest cyber threats and protective measures to prevent similar incidents from happening again. Only in this way can we collectively build a safer and more reliable Crypto Assets ecosystem.