What is a dust attack
Dust attacks are a new method of malicious activity in which hackers and scammers seek to gain access to sensitive data of cryptocurrency users by sending small amounts of coins to their personal wallets. Many cryptocurrency experts believe that the anonymity of their transactions is well protected from such attacks, but practice tells a different story.
Dust Definition
In the world of cryptocurrencies, the term "dust" refers to a minute amount of coins or tokens, so small that it is often neglected. For example, in the case of Bitcoin, the smallest unit of currency is 1 satoshi (0.00000001 BTC), and a couple hundred satoshis could be called dust.
In other words, dust represents such a small transaction or amount that sending it is not profitable due to the high transaction fee. On cryptocurrency exchanges, dust refers to a small number of coins that are “stuck” and cannot be traded.
Most users do not pay attention to the dust in their wallets and rarely think about its origin. Until recently, this was quite normal, but with the advent of dust attacks, this approach is no longer so safe.
In other words, dust represents such a small transaction or amount that sending it is not profitable due to the high transaction fee. On cryptocurrency exchanges, dust refers to a small number of coins that are “stuck” and cannot be traded.
Most users do not pay attention to the dust in their wallets and rarely think about its origin. Until recently, this was quite normal, but with the advent of dust attacks, this approach is no longer so safe.
How the dust attack works
Recently, scammers have discovered that Bitcoin users pay little attention to the tiny amounts appearing in their wallets. Using this knowledge, they began to massively spread “dust” to many addresses, sending several satoshis to each.
They then tracked these funds and all transactions from the dusty wallets, allowing them to link addresses and ultimately identify the companies or individuals behind them.
They then tracked these funds and all transactions from the dusty wallets, allowing them to link addresses and ultimately identify the companies or individuals behind them.
By including small amounts of cryptocurrency in other transactions, the target of an attack can inadvertently and unknowingly send dust to a centralized organization outside the blockchain. Since the centralized platform must comply with Know Your Customer (KYC) regulations, it will store the victim's personal data.
Attackers can use this information for extortion, blackmail, phishing and other illegal activities. Initially, such attacks were associated with Bitcoin, but they also extend to other cryptocurrencies and blockchain networks.
In October 2018, the developers of the Bitcoin wallet Samourai announced that some of their users had become victims of dust attacks. To warn its users, the company published a tweet where it explained how to protect itself from this type of attack. Now, to keep users safe from dust attacks, the wallet offers a real-time alert feature to track dust, as well as a "Don't Spend" feature that allows users to flag suspicious funds and avoid using them in future transactions.
Can dust attacks steal cryptocurrency?
A dust attack does not directly result in the theft of cryptocurrency, but more sophisticated methods can trick users into stealing their funds. Its purpose is to identify and de-anonymize users for possible blackmail or other illegal actions.
With the development of technologies such as NFTs and decentralized finance (DeFi), attackers are becoming more cunning and disguising fraudulent tokens as free cryptocurrency giveaways. They create phishing sites that imitate popular NFT projects to trick wallet owners into gaining access to their assets.
Phishing sites do not steal logins and passwords, but convince victims to connect their wallets directly to malicious resources. By giving these sites permission to access their wallets, the unsuspecting victim gives hackers the opportunity to move their funds and NFT assets into their wallets.
Dust attacks are becoming increasingly common on browser-based wallets such as MetaMask and Trust Wallet, which are primarily used to access decentralized applications (DApps) and Web3 services. Browser wallets are especially vulnerable to such attacks due to their widespread availability and the ability to be easily attacked by hackers or scammers.
With the development of technologies such as NFTs and decentralized finance (DeFi), attackers are becoming more cunning and disguising fraudulent tokens as free cryptocurrency giveaways. They create phishing sites that imitate popular NFT projects to trick wallet owners into gaining access to their assets.
Phishing sites do not steal logins and passwords, but convince victims to connect their wallets directly to malicious resources. By giving these sites permission to access their wallets, the unsuspecting victim gives hackers the opportunity to move their funds and NFT assets into their wallets.
Dust attacks are becoming increasingly common on browser-based wallets such as MetaMask and Trust Wallet, which are primarily used to access decentralized applications (DApps) and Web3 services. Browser wallets are especially vulnerable to such attacks due to their widespread availability and the ability to be easily attacked by hackers or scammers.
How to recognize dust attacks
One of the telltale signs of a wallet dust attack is the sudden appearance of small amounts of additional cryptocurrency that is unusable for spending or withdrawal.
The “dust” transaction will appear in the wallet history, making verification easier. Additionally, cryptocurrency exchanges that operate under KYC and AML regulations store their customer data, making them a potential target for cryptocurrency scams.
In October 2020, Binance experienced a dust attack where a small amount of BNB was sent to multiple wallets. Victims would receive a transaction confirmation with a link to malware that could trick them into unknowingly being hacked as soon as they submitted the dust in combination with other means.
After a dust attack, a cryptocurrency provider such as an exchange or wallet is usually advised to take strict measures to prevent similar incidents in the future.
In October 2020, Binance experienced a dust attack where a small amount of BNB was sent to multiple wallets. Victims would receive a transaction confirmation with a link to malware that could trick them into unknowingly being hacked as soon as they submitted the dust in combination with other means.
After a dust attack, a cryptocurrency provider such as an exchange or wallet is usually advised to take strict measures to prevent similar incidents in the future.
How to prevent dust attacks
Although the likelihood of becoming a victim of a dust attack is extremely low, cryptocurrency users should take several steps to protect themselves from such incidents.
Since dust attacks are based on the analysis of multiple addresses, if the dust fund remains static, attackers will not be able to trace a transaction that is not occurring, and therefore will not be able to establish the connections necessary to de-anonymize wallets.
Important steps to combat these types of attacks are education and caution. However, there are more sophisticated methods for protecting wallet funds that can be used to increase security:
Since dust attacks are based on the analysis of multiple addresses, if the dust fund remains static, attackers will not be able to trace a transaction that is not occurring, and therefore will not be able to establish the connections necessary to de-anonymize wallets.
Important steps to combat these types of attacks are education and caution. However, there are more sophisticated methods for protecting wallet funds that can be used to increase security:
Using privacy tools such as The Onion Router (TOR) or Virtual Private Network (VPN).
Uses a hierarchical deterministic (HD) wallet that automatically creates a new address for each new transaction. This makes it difficult for hackers to track the flow of transactions.
To exchange crypto dust for your own tokens for use in future transactions, you can use dust conversion services. This avoids unwanted dust in your wallet and improves transaction security.
Conclusion
To avoid such crypto fraud schemes, you should be extremely careful and careful.
Simple steps and a little of your time will save your money and nerves! What to do if you do become a victim of crypto fraud (we hope not), read here.
We also remind you that it is necessary to check the risks associated with your counterparties in the blockchain. The question “how to check high risk in cryptocurrency” is answered by special aml services such as our Btrace. AML address verification in our solution will take only 3 seconds, but will save you from many risks. And the first check is absolutely free.
Simple steps and a little of your time will save your money and nerves! What to do if you do become a victim of crypto fraud (we hope not), read here.
We also remind you that it is necessary to check the risks associated with your counterparties in the blockchain. The question “how to check high risk in cryptocurrency” is answered by special aml services such as our Btrace. AML address verification in our solution will take only 3 seconds, but will save you from many risks. And the first check is absolutely free.
Check blockchain address using Btrace
In seconds, determine the risk level of the counterparty’s address, find out the source of his funds and make an informed decision about interacting with him.
PREVENT FUNDS BLOCKING
PROTECT YOURSELF FROM SCAMMERS
AVOID TROUBLE WITH THE LAW
We also recommend