With bitcoin recently pushing past the $19,000 level (despite crashing hard on Friday) and a slew of other cryptocurrencies like ethereum, litecoin and Ripple making rapid price gains in its wake, it’s never been a more bullish time for digital currency investors. But there is always a price to be paid for such success and in this case cryptocurrency’s massive surge in popularity is likely to trigger an epic wave of crime.
Already on December 4th, the SEC announced it shut down an initial coin offering (ICO) for allegedly defrauding investors of $15 million. However, while fraud is an inherent risk of cryptocurrency, as wallets, exchanges and ICOs all take place with little to no legal or regulatory oversight, it is hacking which presents a far more serious threat for investors because it is so widespread and so difficult for the average person to avoid.
Hacking has been a recurring problem for this industry from the very beginning. In fact, a report last year from the US Department of Homeland Security found that 33% of bitcoin exchanges were hacked between 2009 and 2015, and one-off scams and attacks on individual investors have been occurring throughout that time as well.
But if prices continue to rise, it will incentivize many more attacks. After all, cryptocurrency cyber heists are now extremely lucrative, with the opportunity to make tens of millions of dollars from a single attack. This will likely entice more hacking groups to expand their operations beyond traditional revenue streams – “banking Trojans,” “ransomware,” “carding,” etc. – to take on cryptocurrency investors as well. Cybercriminals go where the money is and right now the money is definitely in bitcoin.
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