Cyptocurrency and crime are never too far away from one another. As any crypto is digital by nature, it is immediately vulnerable to cyberattacks. This can come in old-school forms of scam emails, more technical approaches such 51% attacks, and even just old fashioned theft. Vulnerablities in wallets, exchanges, and even the way users operate in the space are all attractive to criminals.
After all, it’s an easy space for criminals to operate in. There’s no regulations, no protection, and very little user rights in the world of cryptocurrency. If your funds are stolen, for example, not much can be done to reverse the transaction. That’s why security and safe practices are so crucial within the industry. The onus is always on the individual. You’re responsible for the safety of your own crypto.
Despite market volatility, Bitcoin is still quite a valuable cryptocurrency, with 1 BTC sitting at around £4,200. It’s a particularly attractive endeavour for online thieves. In fact, $1.7bn of cryptocurrency was stolen in 2018. A quick scan of the news is all it takes to discover that many exchanges have been hacked and exploited, with funds being moved from users to the wallets of fraudsters and thieves. Theft of crypto is, unfortunately, a common story.
The value of cryptocurrency and the anonymity it offers can often lead to more sinister crimes. Kidnapping isn’t all too rare in the space. Kidnappers have previously demanded a ransom of €9 million in cryptocurrency Monero, in return for the freedom of Anne-Elisabeth Falkevik Hagen – the wife of one of the wealthiest men in Norway.
Crimes in the space vary. Some can be blatant, some can be sophisticated. Sometimes you’ll never know that you’re a victim until your funds have disappeared.
With so many threats about, it’s important that you protect yourself from all angles. This means thoroughly researching any exchanges and wallets you plan on using. You should always carry out diligent research, keep up-to-date with the latest news, and read reviews from other cryptocurrency users.
Familiarise yourself with the different types of exchanges and wallets on offer. For example, would you prefer to use a decentralised exchange where you don’t need to trust a third party to protect your fund? Would you prefer to use a paper wallet that has no connectivity but is impossible to replace once lost? Most of all, be sure to use best practices. These include applying two-factor authentication, keeping your private key private, and never depositing large amount of crypto into a mobile wallet.
There are many ways to mitigate threats in cryptocurrency, but you need to decide what works best for you, your beliefs within the crypto space, and your amount of funds. Also note that those who invest and trade heavily in cryptocurrency will require greater levels of security than hobbyists who like to dabble with lesser amounts.
Yes, crime and cryptocurrency do currently go hand-in-hand. But everyone across the industry needs to work together to change this narrative. Instead, it should be that cryptocurrency and security go hand-in-hand. By carrying out thorough research, watching out for new scams or crimes on the horizon, and choosing exchanges with more care, it can be easier to keep your cryptocurrency protected. With everyone working together and adopting best practice, cryptocurrency might just be able to overcome criminality.
To find out more about the role security plays in cryptocurrency, and how you can keep yourself online, make sure you download this definitive guide.