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Cryptocurrency Cyber Attacks Are On The Rise

By June 9, 2022January 10th, 2024No Comments

The cryptocurrency market is growing exponentially, but the recent wave of cyber-attacks and scams has shown the industry is struggling on the security front.

“Cryptocurrencies are digital or virtual currencies secured by cryptography, with many using decentralized networks based on blockchain technology – an open, distributed ledger that records transactions in code. Crypto is stored in a digital “wallet,” which can be on a website, on a computer or an external hard drive. To put it simply” Investopedia defines cryptocurrencies It is a system that allows payments online, which are denominated in terms of virtual “tokens.”

Bitcoin, the first cryptocurrency launched a little over a decade ago.  The creator, Satoshi Nakamoto, described it as “an electronic payment system based on cryptographic proof instead of trust.” Other common types of cryptocurrency include Litecoin, Namecoin, Dogecoin, Ethereum, Cardano and others. In March 2021, there were reportedly over 18.6 million bitcoins in circulation, with a total market cap of around $927 billion!

There is no physical coin or bill involved in cryptocurrency. It is a type of digital currency that only exists electronically, with no backing from a government and no central authority managing the value. An advantage of cryptocurrency is that it can be easily exchanged online, using a computer or phone, usually for quick payments to avoid transaction fees charged by traditional banks, but due to the semi-anonymous nature of the transaction, users could be opening themselves up for a host of different types of scams or even illegal activities! Cryptocurrency

A ransomware attack struck the Colonial Pipeline in early May 2021.  A hacker group known as “DarkSide” forced the company to shut down over 5,000 miles of pipeline in the southeastern United States until the hackers received a total of $5 million in bitcoin ransom payments. Thankfully, U.S. law enforcement officials were able to recover $2.3 million of the ransom paid after identifying a virtual currency wallet the hackers used to collect the payment. The “DarkSide” reportedly has been paid $90 million in bitcoin ransom payments from 47 victims, with the average amount being $1.9 million!

According to the Federal Trade Commission (FTC), one of the biggest signs of a cyber scam is when a cybercriminal asks an individual or company to pay by cryptocurrency. Whenever there’s a request to pay by gift card, wire transfer or cryptocurrency, it’s a major red flag that you’re about to fall victim to a cyber attack. Once you pay the scammer in one of those ways it becomes nearly impossible to recover the money. 

Companies and major financial institutions have begun to recognize digital currencies, amplifying the need for crypto-related insurance policies. The Colonial Pipeline attack was one of the most disruptive cyberattacks in history, resulting in substantial expenses, including days of lost revenue and the $5 million ransom payment. Most cybersecurity scams target personal data.  However, this attack had a major impact on the entire country’s infrastructure and became a wake-up call to consumers everywhere!

There are pros and cons to cryptocurrency.  Let’s take a look at the pros.

Asset Trading

By paying the seller with bitcoin, cryptocurrencies can be used to transfer ownership of items from one name to another. This allows you to do transactions safely and securely.

Crypto Transactions

Brokers, agencies, and authorized counsel can create considerable intricacy and price to what could be a very private exchange in traditional business interactions.  One of the benefits of cryptocurrency transactions is that they are one-to-one which makes it common practice by nullifying the middle man concerns.

Now let’s take a look at some of the cons.

Scalability

The scalability issues that cryptocurrencies bring are the most serious ones. Despite the indication that the number of crypto-assets and their usage is fast-growing, it is still related to the number of information transmitted by payment behemoth VISA. 

Price Volatility

Price unpredictability is linked to a paucity of fundamental worth which is a key issue. The volatile cryptocurrency market results in significant gains or losses. The cost of currencies can fluctuate a lot in a short period of time.  Making it a high risk. In 2017, Bitcoin reached new highs of around $20,000 per coin. It is currently valued at roughly $11,000 per coin as of August 2020.

Cybersecurity 

And now to our specialty.  Cryptocurrencies, like digital assets, will be vulnerable to protection breaches.  Attempting to combat this would demand continual security technology upkeep, but certain companies are already confronting the problem head-on and adopting advanced cybersecurity risks that go beyond those used in typical banking systems.

Check out the video below on how to secure your cryptocurrency and personal information.

 

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Source:

https://www.techtarget.com/searchsecurity/feature/Cryptocurrency-cyber-attacks-on-the-rise-as-industry-expands

https://amtrustfinancial.com/blog/small-business/cryptocurrency-and-cybersecurity

https://www.nasdaq.com/articles/the-pros-and-cons-of-buying-cryptocurrencies-2021-08-31