Crypto users are losing billions every year, not because blockchain is weak, but because hackers exploit human mistakes. Crypto security expert Justin, also known as D3f4ult Trades, warns that most crypto users are still dangerously exposed, making them easy targets for cybercriminals.
“People think their funds are safe just because they use a decentralized wallet or a well-known exchange, but that’s far from the truth. The biggest exploits don’t happen at the blockchain level, they happen when users make security mistakes,” Justin explains.
With billions of dollars stolen annually through phishing scams, SIM-swapping, exchange breaches, and malware attacks, it’s clear that crypto users need to do more to protect themselves.
The Scale of Crypto-Related Hacks
The numbers reveal just how severe the crypto security crisis has become. According to Chainalysis, cybercriminals stole over $3.7 billion from crypto platforms and users in 2023, with a significant portion coming from phishing scams, wallet compromises, and social engineering attacks.
A 2023 CertiK report found that 50% of crypto exploits were due to private key leaks from phishing attacks, where users were tricked into entering their credentials on fake exchange websites or malicious wallet apps. Another major attack vector was SIM-swapping, which resulted in millions in losses, particularly targeting high-profile individuals and retail investors who relied on SMS-based two-factor authentication (2FA).
Adding to the growing threat, over 60% of stolen funds came from users unknowingly downloading malware-infected applications or interacting with fake smart contracts designed to drain their wallets.
Cybercriminals constantly evolve their tactics, using AI-generated deepfake videos, fake Twitter (X) profiles, and even impersonating crypto influencers to deceive investors. With each successful attack, hackers refine their strategies, making it harder for users to distinguish between real and fraudulent interactions.
Despite advancements in exchange security, hackers are adapting faster than users are improving their defenses. Justin, a cybersecurity expert, warns that the biggest risk isn’t in the blockchain itself but in the habits of crypto users.
“Hackers don’t need to crack cryptography. They just need to trick one person into clicking the wrong link, and suddenly, they have full access to a million-dollar wallet,” Justin said.
The problem isn’t just about exchanges getting hacked, it’s about users making critical mistakes that allow criminals to exploit them directly.
Without stronger authentication practices, improved awareness, and more robust fraud detection tools, crypto users will remain the easiest targets in an increasingly dangerous digital landscape.
How Hackers Target Crypto Users
Phishing Attacks: The Easiest Way to Steal Crypto
One of the most common and effective attacks is phishing. Hackers impersonate crypto exchanges, wallet providers, or even well-known crypto personalities, sending fake emails, DMs, or website links that trick users into entering their private keys or seed phrases.
A notable example was the fake MetaMask browser extension scam, which tricked users into entering their recovery phrases, leading to millions in stolen funds. A 2023 FBI report confirmed that phishing scams are responsible for over $300 million in crypto-related losses annually.
SIM-Swapping Attacks: Gaining Control of Accounts
Many crypto users rely on SMS-based two-factor authentication (2FA), which is one of the biggest security risks.
Hackers convince mobile carriers to transfer a victim’s phone number to their own device, allowing them to bypass security protections and reset exchange passwords.
This method was used in the 2020 attack against high-profile crypto figures, including Elon Musk and Binance’s CEO, resulting in millions lost in crypto and compromised Twitter accounts. Justin emphasizes that users should stop using SMS-based 2FA immediately.
“If your exchange or wallet still uses SMS 2FA, you’re playing with fire. SIM swapping is the easiest way for hackers to take over your entire digital identity,” Justin cautions.
Instead, security experts recommend using app-based authenticators like Google Authenticator or hardware security keys (such as YubiKey) for better protection.
Malware and Fake Wallet Apps: Silent Crypto Drainers
Another major threat comes from malicious software disguised as legitimate crypto tools. Hackers create fake wallet apps, mining software, or trading bots, which users unknowingly download. Once installed, these apps silently drain wallets by capturing keystrokes or injecting malicious smart contracts.
In 2022, a fake Trezor app on Apple’s App Store tricked users into entering their private keys, leading to hundreds of thousands in stolen funds. Security researchers from Elliptic found that over 100 fake wallet apps circulate online at any given time, preying on unsuspecting users.
Justin’s Essential Security Tips
Given the evolving nature of crypto threats, Justin outlines several critical steps that every user must take to avoid becoming an easy target. The most fundamental rule is to never share private keys or seed phrases.
Your seed phrase is the master key to your crypto holdings, and no legitimate service will ever ask for it. If someone does, it’s an outright scam. He strongly advises storing it offline, preferably on paper or a hardware backup, to prevent digital theft.
For long-term storage, Justin emphasizes the importance of hardware wallets like Trezor or Ledger. While hot wallets such as browser extensions or mobile apps are convenient, they are also prime targets for hackers. Hardware wallets keep private keys offline, making them immune to malware attacks and phishing attempts.
One of the biggest vulnerabilities in crypto security is SMS-based two-factor authentication (2FA), which is highly susceptible to SIM-swapping attacks. Justin strongly recommends switching to app-based authentication using Google Authenticator or Authy or, even better, using a hardware security key like YubiKey for maximum protection against account takeovers.
Another crucial habit is to verify every transaction and website URL before entering any sensitive information. Hackers frequently create fake crypto exchange websites and phishing links that look nearly identical to real platforms. Using browser bookmarks for frequently visited exchanges and wallets can help users avoid falling victim to phishing scams.
Staying informed about security threats is just as important as using the right security tools. Justin urges users to follow trusted security researchers and crypto platforms to stay updated on the latest hacking techniques and vulnerabilities.
“The moment you think you’re safe is the moment hackers win. Crypto security isn’t about paranoia, it’s about staying one step ahead,” Justin concludes.
By taking these proactive measures, crypto users can significantly reduce their risk of falling victim to the ever-growing wave of cyber threats.
Crypto Users Must Step Up Their Security
Despite the advancements in exchange security and blockchain encryption, hackers continue to successfully exploit human vulnerabilities.
The Bybit hack and countless other crypto breaches prove that no one is immune, but users who take proper precautions can significantly reduce their risks.
Justin’s warning is clear: most crypto users remain easy targets because they don’t prioritize security. Until stronger habits and better security tools become standard practice, hackers will continue to steal billions from unsuspecting investors.
