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ConsenSys’ self-custody wallet MetaMask is partnering with Asset Reality, a platform for accessing and recovering seized crypto and digital assets, to tackle cryptocurrency fraud. The two companies will support MetaMask scam and phishing victims in attempting to recover their assets.
We’ve partnered with @metamask!
— Asset Reality | Techstars ‘21 🚀 (@asset_reality) May 26, 2022
We’ll be helping victims of crypto-related fraud to recover their stolen digital assets in an industry-first approach to improving virtual asset recovery.
Read more about this exciting new partnership: https://t.co/WBdRjWp1W0@Consensys #crypto
The main security concerns for crypto wallet users are phishing scams that cast a wide net, as well as targeted spear-phishing attacks, according to MetaMask. Bad actors most commonly pose as a friendly face offering to help users navigate crypto’s technical jargon and trick users into handing over their funds.
MetaMask’s strategy is to pool information from a number of victims in the hope that it will help both identify the scammer and make recovering the stolen assets less costly. To use the service, victims must submit a ticket for investigation.
Some examples of recent attacks include a $650,000 phishing scam of a MetaMask wallet user targeted by a hacker posing as an Apple employee. MetaMask’s response, which was criticized at the time by community members, was to issue a warning to users whose data were susceptible to hackers because their iCloud backups include their password-encrypted MetaMask vault.
Earlier this week, a Moonbirds NFT holder lost 29 of his Ethereum-based Moonbirds, worth around $1.5 million at the time, after signing a bad transaction on a fake trading site he reached by clicking a malicious link shared by a scammer. The victim was a member of the Proof Collective, a private group of 1,000 dedicated NFT (non-fungible token) collectors and artists. Although the scammer was identified, only an FBI report was filed.
Harry Denley, an information technology security analyst at MetaMask, told Blockworks that bad actors are “simply taking advantage of a nascent industry where new users are generally optimistic, excited by the potentials, and not very experienced with having full control of such valuable assets.”
Cybercrime is a multi-billion dollar worldwide industry, he added, emphasizing the importance of hack victims coming forward, no matter how small the loss.
Traditional recovery, however, involves lengthy and often costly civil litigation, with no guarantee of recovering funds. According to Asset Reality’s Alex Herman, digital asset recovery is difficult due to the cryptocurrency’s “pseudo-anonymous” and “immutable” nature.
“While traditional systems opt for transactions to be reversible and accounts to be frozen, crypto has prioritized the control of the individual user and decentralized systems. Bad actors can also use obfuscation techniques to make it harder to track stolen funds,” Herman told Blockworks.
In the case of a scam, MetaMask will request any relevant information regarding phishing websites, vectors and funds lost, while Asset Reality will handle the case for MetaMask’s affected users. They will build an investigation into each scam operation and manage any communication with the users.
Along with recovery mechanisms in place, MetaMask and Asset Reality hope to protect users by expanding their education tools and offerings on their platform.
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