What is a Keylogger

Crypto Keylogger Explained

Keylogger attacks can be potentially devastating to cryptocurrency owners as cybercriminals can now save every crypto information they type on their keyboards.

It is a tool designed to capture all keystrokes of a computer, either through a software program or through a hardware device. This keyboard recording activity is also referred to as keylogging or keystroke logging.

Though keylogging is not illegal, the way people use it in fraudulent and malicious activities makes it a crime.

Defining a Keylogger

A keylogger is a piece of software that records any text an infected user inputs into the keyboard. It then passes on the recorded data to a hacker. Since keyloggers record keystrokes made by computers, they’re extremely dangerous in cryptocurrency.

Keylogger attacks could be potentially catastrophic for cryptocurrency holders regardless of the amount. After all, if one loses the private keys to its crypto wallet, it is certain that he or she will also lose all his/her cryptocurrency. Once hackers gather the keystrokes, they can easily authorize transactions to and from the target wallet.

It’s important to know that keylogger attacks rarely affect just one device. They commonly appear as elements of more complex viruses which may include screen recording, clipboard recording, webcam recording, access to the user’s file system, and access to the user’s browsing history.

The threat level of keylogger attacks thus increases as a result. It also means that not even cold wallets provide a safe harbor. They can also be accessed on the infected user’s computer.

How does a keylogger work?

The primary concept behind keyloggers is that they must be placed between when a key gets depressed on a keyboard and when the information regarding that keystroke appears on the monitor. There are several ways to accomplish this.

Some hackers use video surveillance to see the connection between the pressed keys and what appears on the monitor. A video camera with a view of the keyboard and the screen can be set up. Once it records a video of the keystrokes and the login or authentication screens the strokes have to get past, the hacker can play the video back, slow it down, and see which keys were pressed.

An attacker can also put a hardware bug inside the keyboard itself. This would record each stroke made and send the information to be stored, either on a server or nearby physical device. It is possible for a keylogger to be placed within the wiring or inside the computer — as long as it is between the keyboard and the monitor.

Additionally, keylogger software can be designed to intercept all input that comes from the keyboard. This can be done using a few different methods:

  • The driver that facilitates the interaction between the keyboard and the computer can be replaced with one that logs each keystroke.
  • A filter driver can be positioned within the keyboard stack.
  • Kernel functions, which use similarities between data to assist machine learning, can be intercepted by software keyloggers and then used to derive the necessary keystrokes to perform authentication functions.
  • The functions of the dynamic link library (DLL), which stores code used by more than one program, can be intercepted.

The software, which is recognized as a form of spyware, is built using a few different methods. Here are the most common:

  • A system hook, which is a technique for altering the operating system’s behavior, is used to intercept each notification generated whenever a key is pressed. This kind of software is typically built using the coding language C.
  • A cyclical information request is set up that gathers information from the keyboard. These kinds of keyloggers are typically written using Visual Basic or Borland Delphi.
  • A filter driver is written in C and installed inside the computer.

As a sort of defense mechanism, some keyloggers, referred to as rootkits, have the ability to disguise themselves to slip manual or antivirus detection. They either mask in user mode or kernel mode.

Keylogger attacks

To gain access to your device, a keylogger must be installed in the device — in the case of a hardware keylogger, physical drives connected to the computer are required. There are a few different ways keyloggers attack your device. Take note of these keyloggers schemes:

1. Spear Phishing
Spear phishing is one of the most prominent methods of initiating a malware infection. In most cases, a phishing email or link is used to target a user. The link looks legitimate — it may even appear to come from a relative or a friend. However, after you open the email or click on a link, a keylogger is installed on your device. Spear-fishing attacks may also be used to launch a sextortion attack.

2. Drive-by Download
Drive-by downloading refers to when a keylogger is installed on your computer without you knowing. This is often accomplished using a malicious website. When you visit the site, malware gets installed on your computer. It then works in the background, undetected, logging your keystrokes, then sending them to the attacker.

3. Trojan Horse
It is common for Trojan horses to have keyloggers bundled inside. A Trojan horse, similar to the one used in the Greek myth, appears to be benevolent. When the user opens it, malware containing a keylogger gets installed on their device. The malware, once installed, keeps track of the user’s keystrokes and then reports them to a device accessed by the hacker.

How to detect a keylogger?

Are there telltale signs that your device is hosting a keylogger? The answer is, it depends. Like most malware, you can use a good antivirus/anti-malware scanner to find and remove keyloggers.

Subpar keyloggers (such as the malware variety) might reveal themselves in a number of ways. The software might subtly degrade smartphone screenshots to a noticeable degree. On all devices, there could be a slowdown in web browsing performance. Or there’s a distinct lag in your mouse movement or keystrokes, or what you are actually typing doesn’t show up on screen. You might even get an error message when loading graphics or web pages. All in all, something just seems “off.”

A well-designed keylogger works flawlessly, so it does not affect system performance at all. If the keylogger is sending reports to a remote operator, it disguises itself as normal files or traffic. Some of the programs will even display a notice on the screen that the system is being monitored — such as in a corporate environment. Others can reinstall themselves if users somehow succeed in finding them and attempt to remove them.

Of course, the best way to protect yourself and your equipment from falling victim to keyloggers is to scan your system regularly with a quality cybersecurity softwares.

How to avoid keylogger attacks?

1. Use antivirus software

Your first safeguard when it comes to protecting your assets from a keylogger attack is practicing basic cyber hygiene. This begins by using a reliable antivirus software and making sure that it is up to date.

2. Perform basic computer scanning and cleaning

Beyond antivirus software, general computer literacy and basic precautionary measures can play an important role. This means staying alert when surfing the net, not opening links from unknown sources, and being wary of attachments.

You should also triple-check websites that you’re entering your personal data to, particularly when it comes to using a cryptocurrency exchange.

3. Take extra care during transactions

You need to be vigilant during transactions: Check the receiver’s address when copying and pasting addresses as malware can swap addresses from one to another, and this is indicative that an account has been compromised.

4. Use a hardware wallet

One of the best ways to keep your cryptocurrency safe is to use a cold wallet. However, this doesn’t guarantee your safety once you connect your wallet to the internet.

Keyloggers can be used to steal users’ private keys, which can then be used to transfer tokens from cold wallets, and also to record users’ passwords on exchanges in order to withdraw tokens from their accounts.

5. Try a human-readable address

While the majority of wallet addresses are machine-readable, there are currently several initiatives to make them human-readable. This will greatly improve the user experience and allow users to instantly notice if an address has been changed.

Final Thoughts

In the current crypto space, keyloggers have grown from spying tools used by criminal organizations to a commercial market of their own, allowing the average individual to purchase their own copy of keylogging software.

Like all cyber threats, you should be vigilant when it comes to keylogger attacks. In many cases, you can avoid them by using common sense. They don’t call it the ‘Wild West’ for nothing, so it pays to be on your guard.



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