As digital currencies gain traction, so do the number of scams and illicit schemes aimed at crypto users. One of the most prevalent risks are fake wallet applications, which deceive users into installing software that can expropriate their private keys and siphon funds from their accounts. Recognizing and sidestepping these fraudulent wallet applications is critical in protecting your crypto assets.
In the rest of the article, we will discuss how to avoid falling into the trap of fake wallet apps, and the most effective ways to safeguard your funds.
Fake wallet apps are perilous because they can be disguised well enough to look like real crypto wallets. Their purpose is to expropriate your private keys and gain access to your funds. After entering your private keys or recovery phrases into these fake applications, the attackers will then initiate the transfer of your cryptocurrency to their wallets.
These fake wallet applications can be very devastating in terms of the financial and private data that we can lose. Some of the identified risks these apps pose are:
- Loss of funds: the fake wallet applications are capable of expropriating your crypto the minute you provide your private keys or recovery phrases.
- Phishing attacks: a good number of fake wallet applications seek personal details or employ phishing tactics to gain login credentials.
- Malware: some fake apps can go the extra mile to provide malware services which provide hackers access to your private data.
How to Spot Fraudulent Wallet Applications
- Review the Developer’s Information
The information available for the developer is one of the first things to check before downloading any wallet app. Fraudulent apps usually lack information about their developers or use fictitious credentials.
Legitimate Wallets: Trusted wallets like MetaMask, Trust Wallet, or Coinbase Wallet will always have clear developer information, official website links, and customer support.
Fake Wallets: Pay attention to the apps that provide vague developer information or tend to use shoddy, poorly written descriptions. - Look Over Reviews and Ratings
Check the reviews and ratings before downloading the app. Fraudulent apps usually provide fake reviews and rate the app higher than it deserves.
Legitimate Wallets: Popular wallets usually have a significant amount of reviews, both positive and negative from actual users.
Fake Wallets: Review these apps. You will find numerous fake and robotic comments with only positive reviews and no negative feedback. - Download Only From Recommended Places
Avoid fraudulent wallet applications. Downloading apps only from recognized places such as the Google Play Store (for Android) or the Apple App Store (for iOS) will help a great deal.
Legitimate Wallets: These wallets can be downloaded from trustworthy app stores and they have been both reviewed and authenticated by the respective platform.
Fake Wallets: Sometimes, you can find fake wallets hidden outside app stores. These are the same ones that encourage users to download APKs or apps from unverified websites. - Check the App’s Name and Icon Again
Android fake wallet apps usually change the name or icon to look slightly different from official ones. This can include altering a single letter or using logos that look very close to the original.
Legitimate Wallets: Always check that the app name, and icon, match the official wallet’s name exactly.
Fake Wallets: Remain vigilant for apps with slightly changed names or poor quality icons. - Check Permissions the App Requires
Permissions linked to the app need to be checked before downloading the app. It only has to be linked to the internet and the phone’s storage for backup, and nothing else.
Legitimate Wallets: Permission is granted only to those that are trusted.
Fake Wallets: Take caution with apps that provide vague and suspicious permissions like them having your contacts, microphone, or even the camera.
Preventing Fake Wallet Apps
- Stay with Trusted Wallets
Use trusted crypto wallets like MetaMask, Trust Wallet, Ledger Live, and Coinbase Wallet. They are well-known and have favorable reviews in the crypto community.
Best Practice: Always download applications from the official site or app store. - Activate 2-Factor Authentication (2FA)
If available, activate 2-Factor Authentication (2FA) for your wallet. It provides another layer to already existing security measures. This makes it extremely difficult to gain access to an account even if the password is known.
Best Practice: Use Google Authenticator, or Authy. Staying SMS 2FA is the weakest method, as it can allow outside attacks. - Do Not Use Public Wi-Fi Networks for Accessing Wallets
Do not use public Wi-Fi to access your wallet since those networks are unsecured and can be exploited easily.
Best Practice: It is advisable to use a VPN (Virtual Private Network) to safeguard your connection and data privacy from malicious attacks. - Keep Your Recovery Phrase Stored on Paper
If your wallet is lost for any reason, your recovery phrase will allow you to restore it. Do not keep your recovery phrase in emails, notes applications, or on any clouds, as they could be hacked.
Best Practice: Recovery phrases should always be written on paper, stored in safes or similar secure locations. - Always Keep Informed On The Best Practices For Crypto Security
As new threats, scams, and security breaches emerge, crypto security is rapidly evolving. Always keep your ear to the ground for new credible information to keep your assets safe.
Best Practice: To always remain up to date, crypto communities, blogs, and security trust reputable sources.
What to Do if Your Downloaded a Fake Wallet App
If you ever find yourself in such a scenario, the immediately actionable suggestions are as follows:
- Uninstall the App: For maximum security, remove the app from your device.
- Change All Passwords: If you’ve entered any passwords, private keys, or recovery phrases for your account, be sure to update them immediately.
- Check Your Crypto Holdings: Ensure your crypto is in a secure wallet, be it a hardware wallet or a well-known software wallet, and not in any easily accessible wallets.
- Report the App: Report the app to the appropriate app store (Google Play Store or Apple App Store) to ensure other users are alerted.
Conclusion
The exponential rise of crypto currencies has led to an increase in sophisticated scams that target crypto holders. Wallet scams continue to be an issue, however, if you follow the tips given in this article, you will not fall victim to these scams. Always double check the source you are using to download the wallet, check the wallet’s reviews and permissions, and enforce 2FA.
FAQs: Wallet scams and how to identify and avoid them
Q1: What are the signs that a wallet app could be fake?
Always check the description, reviews, permissions and the details related to the developer. Make sure the wallet is available in official app stores or on the developer’s website.
Q2: Is it possible to recover the crypto coins if I used a fraudulent wallet?
If you used a fake wallet to store your crypto assets and you relied on a recovery phrase or private keys, your crypto assets are at risk. However, if you haven’t accessed or used your crypto assets, the best course of action is to move them to a different wallet.
Q3: Are all wallet apps on the App Store or Google Play Store safe?
No, even with some consideration, the official stores and their vetting process cannot be wholly trusted. It is crucial for users to validate the wallet app’s legitimacy by examining the developer’s details, user reviews, and the permissions requested by the app.
