What is a Keylogger and How to Protect Your Crypto Assets?

Basic Definition of Keylogger

A keylogger is a tool designed to capture all keystrokes made on a computer, either through a software program or a hardware device. This activity of recording keystrokes is also known as keylogging or keystroke logging.

Although keyloggers are not illegal in themselves, their use is often associated with malicious operations, especially when targeting cryptocurrency users and trading platforms.

Legitimate vs. Malicious Uses

Legitimate applications

Although keyloggers are often associated with illegal activities, there are legitimate use cases:

• Parental control to supervise children's computer activity
• Business management to analyze how employees use their computers (always with consent)
• Backup of passwords and data in case of operating system failures
• Academic research tool for studying human writing processes

Malicious applications

The most common and concerning purpose of keyloggers is related to malicious activities:

• Theft of sensitive information such as credit card numbers
• Capture of passwords from trading platforms and digital wallets
• Interception of private keys to access digital assets
• Obtaining bank data, personal emails, and other confidential information

Classification of keyloggers

Hardware keyloggers

• They consist of a small chip or cable physically connected to the computer or laptop.
• They are relatively easy to withdraw once installed.
• They collect information that can be reviewed later through a coordinating program.
• Firmware versions can connect to the device's BIOS and log data immediately after power-on.
• Wireless "sniffers" can intercept communications between wireless keyboards and computers.

software keyloggers

They are harder to detect than their hardware counterparts and present a greater risk to cryptocurrency users:

• They are installed as hidden programs, often through phishing attacks or remote downloads.
• The most common ones only record keyboard activity, but there are advanced versions that capture screenshots and clipboard content.
• Less common variants include JavaScript-based keyloggers (embedded in websites), APIs (running within applications), and web forms (logging submitted data).

Protection against keyloggers in the Web3 environment

Prevention of hardware keyloggers

Although it is unlikely to be a victim of a hardware keylogger in private environments, it is a possibility in public spaces:

• Perform visual inspections of USB ports before using public computers
• When entering sensitive information such as wallet passwords, use obfuscation techniques:
  • Write characters in random order
  • Use the mouse to move the cursor to different positions while typing
  • Copy and paste parts of the password from different sources

Protection against software keyloggers

For cryptocurrency users, this protection is crucial:

• Install updated antivirus software with anti-keylogger capabilities
• Consider specific anti-keylogger programs designed to detect, eliminate, and prevent these attacks
• Exercise extreme caution with email attachments, links, and advertisements from unknown sources.
• Keep your operating system and applications updated with the latest security patches.
• Use hardware wallets (cold wallets) to store cryptocurrencies long-term
• Activate two-factor authentication (2FA) on all trading platforms

Detection and Removal of Keyloggers

Warning signals

Some indicators of possible keylogger infection include:

• System performance slower than normal
• The keyboard behaves strangely or there is a delay when typing
• Programs that start automatically without your permission
• Unusual network traffic from your device

Steps to remove a keylogger

1. Examine the system processes to identify suspicious activities
2. Research online any unknown processes to determine if they belong to a legitimate program
3. Monitor the outgoing network traffic from your computer
4. Install specialized anti-keylogger software to detect and eliminate threats
5. If suspicions persist, consider completely formatting and reinstalling the operating system.

Additional measures for cryptocurrency users

Users of trading platforms and owners of digital assets must implement additional layers of security:

• Use devices dedicated exclusively for cryptocurrency transactions
• Consider using virtual keyboards when entering passwords on cryptocurrency-related sites
• Never store seed phrases or private keys in accessible digital files
• Regularly review account activities and set up transaction alerts
• Use biometric authentication solutions when available

The security of your digital assets fundamentally depends on the protection of access credentials, with keyloggers being one of the main threats that must be understood and effectively mitigated.