Technical Defense and Risk Avoidance for Cryptocurrency Fraud

According to a report by the US Federal Bureau of Investigation (FBI) in 2024, the losses caused by cryptocurrency-related scams reached $9.30 billion, a year-on-year increase of 66%. Hong Kong licensed platform HashKey Exchange Through the security system of SOC 1/2 dual authentication, it successfully intercepted 99.7% of phishing attack attempts, verifying the key role of technical defense. A certain DeFi protocol was stolen 23 million dollars due to a smart contract vulnerability, and the platform using the HashKey cross-chain monitoring system increased the abnormal transaction recognition rate to 92%.

Analysis of the technical principles of typical fraud

Attackers use AI to generate high imitation interfaces, such as phishing websites that imitate the AIGC tool "Ke Ling AI", and use Progress Bar animations to simulate the real reasoning process, inducing users to download ZIP files containing malicious code. This type of attack uses RC4 and AES mixed encryption technology, combined with memory-resident execution, to bypass traditional antivirus software detection. In one case, hackers forged exchange emails and guided users to click on ".com" files containing Unicode hidden extensions, resulting in the theft of mobile phone contacts and location information.

Reentry attacks exploit the flaw of delayed contract state updates. For example, in the The DAO event, attackers repeatedly extract funds through recursion calls. The specific process is:

• Call withdrawal function to trigger external transfer
• Attacker contract callbacks the same function as the original contract
• Unlimited withdrawals due to balance not being updated

A certain DePIN project failed to follow the "check-take-action-interaction" pattern, and the attacker manipulated the price oracle through lightning loans, losing 18 million dollars.

Technical architecture of the defense system

HashKey Exchange's dynamic key sharding technology cuts private keys into 128-bit quantum random numbers and stores them in Physical Separation's cold wallet cluster. Its cross-chain settlement system verifies the legitimacy of transactions through zero-knowledge proofs, achieving an asset freeze response time of < 3.6 hours without leaking data. In January 2025, the platform recovered $73,000 in losses for users by intercepting three abnormal withdrawals.

Arkham and other analysis platforms use the Ultra AI address matching engine to associate on-chain addresses with real identities and track the flow of funds after the mixer. For example, a fraud gang confused funds through Tornado Cash, analyzed transaction topology through graph neural networks, and finally locked 23 collection nodes. HashKey's compliance framework supports users to access such monitoring tools and real-time alert suspicious transactions.

III. Security paradigm of user behavior

• Six Confirmation Rules : High-value transactions need to wait for 6 blocks to be confirmed to prevent double-spending attacks
• Hash verification : compare the transaction hash value through the blockchain browser to verify the authenticity of the contract address
• Multi-signature wallet : Large assets adopt 2/3 signature mechanism, such as MetaMask's Schnorr signature scheme

Verification is required when selecting a licensed platform.

• Merkle tree structure for proof of reserve (PoR)
• Hot and cold wallet ratio (industry standard > 95% cold storage)
• Real-time monitoring capability of Anti Money Laundering (AML) system

HashKey Exchange's PoR report shows that its mainstream asset reserve ratios are all over 100%, including BTC 101% and USDT 101%.