ConsenSys, the creator of MetaMask, a non-custodial wallet, has started to cooperate with Asset Reality, a platform for recovering stolen cryptocurrencies and digital assets, to fight cryptocurrency fraud more effectively. Both companies will facilitate asset recovery for MetaMask users who are victims of scams and phishing.
We will help people affected by cryptocurrency fraud recover their stolen digital assets using a completely new approach to virtual asset recovery for the industry.
According to MetaMask, the main problems with the security of users’ cryptocurrency wallets are large-scale and targeted phishing attacks. Attackers most often pretend to be friendly, offering to help users understand the technical jargon of cryptocurrency, and trick users into parting with their funds.
MetaMask’s strategy is to aggregate information from a number of victims in the hope that it will help identify fraudsters and make it cheaper to recover stolen assets. To use the service, victims must make a request for investigation.
Recently, a hacker posing as an Apple employee scammed a MetaMask wallet user out of $650,000. MetaMask’s response, which was criticized by community members at the time, was to issue a warning to users whose data was vulnerable to hacking because their iCloud backups contained password-encrypted MetaMask vaults.
MetaMask information technology security analyst Harry Denley noted that the attackers “are simply taking advantage of the immaturity of an industry whose new users tend to be optimistic, excited about the possibilities and inexperienced enough to have full control over such valuable assets.”
He added that cybercrime is a global industry with a multi-billion dollar turnover, and stressed the importance of victims of hackers reporting crimes, even if the damage they have suffered is insignificant.
However, the traditional method of recovery involves lengthy and often costly lawsuits with no guarantee of a refund. According to Alex Herman of Asset Reality, digital asset recovery is difficult because of the “pseudo-anonymous” and “immutable” nature of cryptocurrency.
While traditional systems opt for reversibility of transactions and freezing of accounts, cryptocurrencies prioritize the transfer of control to individual users and decentralized systems.
Attackers can also use obfuscation techniques to make it harder to trace stolen funds,” Herman said.
In the case of fraud, MetaMask will request any relevant information about the phishing websites, possible referrals and lost funds, while Asset Reality will handle the legal case. They will investigate each fraudulent operation and report back to the affected MetaMask users on all actions taken.
Along with existing recovery mechanisms, MetaMask and Asset Reality hope to protect users by expanding educational tools on their platforms.