Photo by Andre Francois on Unsplash
Amid the curiosity and hype surrounding cryptocurrency, cybersecurity is growing in importance as the financial instrument gains considerable traction. The interest surrounding the resource has catapulted it – and its underlying technology called blockchain – into the spotlight. Worldwide, there are more than 100 cryptocurrency exchanges that trade more than $9 billion daily. Resultingly, leading financial data firms such as Bloomberg and Reuters now track and publish cryptocurrency values for investors, and high-ranking investment firm Goldman Sachs is considering opening a dedicated digital currency trading desk. Legitimate firms are now considering working with digital coins, and even some governments are investigating ways to leverage the innovation by offering state backed cryptocurrency. These factors suggest that it may one day become a permanent and trusted staple in the financial market.
Uncertainly still surrounds the currency, as investors and enterprises wait to see if the market can withstand high volatility, pending legislation and emerging security threats. The following excerpts reveal 7 facts that will give enterprise leaders important insights into this disruptive, new currency.
Fact 1: You Can Add a Second Layer of Protection to Your Enterprise Cryptocurrency Account
When opening a cryptocurrency exchange account, it’s in your best interest to take advantage of the two-factor authentication security feature. Two-factor authentication is an extra layer of defense for your cryptocurrency wallet.
It requires that you use a second form of verification each time that you sign into your account. For example, the Google Authenticator app generates a unique 6-digit code or directs you to simply tap “yes” or “no” on your smart device to verify that it’s you logging into the account, allowing you to reauthenticate your identity using a secondary physical device.
Fact 2: Cybertheft Isn’t the Only Way to Lose Cryptocurrency
Cryptocurrency owners have lost nearly 4 million coins. Most lose access to their private keys by forgetting their passwords, some lose their coins due to the destruction of their hard drives, and others pass away and fail to provide account access for their heirs. It’s difficult, if not impossible, to remember strong passwords for every login. By using a password manager, you can maintain access, while making it hard for hackers to breach your accounts.
Fact 3: Despite Blockchain, Cryptocurrency Is Still Vulnerable to Phishing Attacks
Blockchain, the underlying algorithm that supports cryptocurrencies, is nearly impenetrable. Therefore, hackers find it easier to exploit coin owners rather than spend countless hours and resources attempting to break the nearly bulletproof code.
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Each person who owns cryptocurrency receives a unique key that’s used to verify their transactions and record their assets. However, cyberthieves can easily work around cybercurrency encryption by stealing the account owner’s passcode and sending funds to themselves. In some instances, hackers obtain this information by using malware that can retrieve unsecured cryptocurrency account information stored on a victim’s computer. To date, cybercriminals have used phishing scams to bilk investors of over $225 million in funds.
Fact 4: There’s Counterfeit Cryptocurrency
Ambitious investors aren’t the only one’s capitalizing on the growing value of cryptocurrencies. Cyberthieves are taking advantage of the public’s interest in digital coins by counterfeiting the currency in various ways. One method used by cyberthieves is to emulate an Initial Coin Offering (ICO), where thieves sell shares by accepting cryptocurrency as payment and then disappear after collecting investors’ funds. Another ploy used by cyberthieves is to “spoof” or copy an authentic coin. With this scheme, crooks sell the copied coins to investors and then abscond with collected funds. Cyberthieves have successfully executed this trick by creating social media accounts and websites to establish a facade that appears credible and then soliciting potential investors via phishing emails.
Fact 5: Cryptocurrency Will Not Remain Free of Regulation Forever
The growing threat of cybertheft is attracting the attention of legislators. In the United States, for instance, the Securities and Exchange Commission as well as the Commodity Futures Trading Commission has declared that cryptocurrency is a security and commodity. As a result, institutions that trade in cryptocurrencies must now uphold that same security policies and procedures that apply to other regulated financial instruments. The Japanese government requires that cryptocurrency exchanges hold licenses and follow specific security guidelines, and in the Philippines, the government has gone as far as to require crypto firms to operate in a designated economic zone and are only allowed to conduct trade after vetting.
Fact 6: If You’re Not Careful, Hackers Can Use Information From Social Media to Steal Your Cryptocurrency
Using what’s called social engineering attacks, cybercriminals can gather key and seemingly innocuous information, such as mobile phone numbers and email addresses, from publicly available social media accounts. The cybercriminals then use this information to port a victim’s cell number to a device that they control. Once this is accomplished, hackers can access a targeted cryptocurrency account by using the victim’s mobile device. Using this exploit, cybercriminals can also bypass two-factor authentication.
Fact 7: Hackers Can Steal Other People’s Cryptocurrency Using Your Enterprise Servers
Part of the cryptocurrency architecture encompasses blockchain technology which uses decentralized computing power to solve the algorithms used to verify transactions. Users who provide computing power to solve algorithms are rewarded with fractional remuneration. This has created a market for crypotmining, but the overhead for this endeavor is nearly equal to the profit potential. Resultingly, cybercriminals have resorted to a relatively new exploit called “cryptojacking,” where they steal processing power from electronic devices for cryptomining. Cybercriminals compromise target devices by planting malicious code on websites. When users access the site, the code is downloaded onto their devices. Hackers can then use that device to mine cryptocurrency and reap the rewards for solving algorithms. Sometimes, the code is added to a site unbeknownst to the owner, and other times, website owners install the code – without informing visitors – to generate revenue.
The future of cryptocurrency is uncertain, which is why some firms are taking a “wait and see” approach before considering implementing the currency into their operations. While some governments are regulating the currency, others are considering an outright ban of the technology. In the meantime, the future of cryptocurrency hangs in the balance of legislation, cybercriminal activity and investor demand.
