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Combatting Major Cryptocurrency Security Threats

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Cryptocurrency is becoming increasingly popular due to its remarkable features, such as anonymity, decentralization and a secure digital ledger. These groundbreaking characteristics make cryptocurrency a desirable option for many users. Even its critics admit that 2021 was a watershed moment in its acceptance and growth. According to the Transparency Market Research report, the cryptocurrency market will grow to US$ 6.7 billion in 2025 from US$ 0.5 billion in 2016.

Undoubtedly, the rapid growth of cryptocurrency attracts not only investors but criminals as well, resulting in significant security risks. Cryptocurrencies have become increasingly vulnerable to malicious attackers, and it is essential that we understand the different ways criminals attempt to exploit them. This article will provide a comprehensive overview of the security threats posed by cryptocurrency.

What are cryptocurrency security threats?

According to some reports, cybercriminals have stolen US$ 12.1 billion between 2011 and 2021. They did so by exploiting vulnerabilities in cryptocurrency systems and exchanges. The countries with a high incidence of cryptocurrency security threats include South Korea, Japan, the United Kingdom, the United States, and China. 

Cryptocurrency security threats are cyber risks associated with digital currency transactions and data. These threats can be divided into two categories: malicious attacks and system vulnerabilities.

Malicious Attacks: Malicious attackers, also known as hackers or cybercriminals, try to steal funds or interfere with cryptocurrency transaction processing. Examples of malicious attacks include phishing scams, malware, Denial-of-Service attacks, and man-in-the-middle attacks.

System Vulnerabilities: System vulnerabilities refer to weaknesses in the code or technology used to create and maintain a cryptocurrency system. These vulnerabilities can be exploited by criminals and fall into categories such as software bugs, coding flaws, and malicious code injection.

Prominent cryptocurrency security threats

  1. Phishing attacks: Criminals use phishing techniques to impersonate a credible entity (could be a crypto trading medium/platform) or individuals through emails and influence the victims to carry out actions. They can redirect them to fake pages to steal their crypto wallet credentials.

  2. Malicious or illegal trading platforms & apps: We all know cryptocurrency is in its infancy. Thus, numerous cryptocurrency wallets, trading platforms, and apps are springing up to earn the trust of potential investors. Not all platforms or apps are trustworthy. Some got deployed by cybercriminals to harvest real money from you through fraudulent means.

  3. Blockchain bridging threats are on the rise: Different cryptocurrencies use different blockchain designs that are subject to distinct rules. Suppose someone has Ethereum but wants to spend in Bitcoin. In that case, they must convert it. Attackers often leverage the bugs in these cross-chain bridging. Some of the oversized cryptocurrency hacks we have witnessed so far involve cross-chain bridges, such as Poly Network, Ronin, and Worm-hole.

  4. Insecure or buggy code: Another notable cryptocurrency security threat occurs when vulnerabilities are missed. Secure coding without bugs should be a priority from the beginning of any cryptocurrency project. Hackers also look for vulnerabilities in cryptocurrency trading platforms and websites. They inject malicious code into the websites or web ads (adware) to deploy malware and steal cryptocurrency.

  5. Crypto-malware: Cybercriminals have started designing a unique type of malware. They infect the crypto systems and platforms handling digital assets. Cybercriminals dupe the victim into downloading or installing malicious code on their system through drive-by-download or phishing-like tactics.

  6. Security of cryptocurrency account: Users can only access and transfer their crypto assets if they have the "private key." Private keys are complicated long passwords. Many cryptocurrency account owners keep their private keys on their systems, such as smartphones or computers. These lure the attackers into your system to steal your private key to gain access to your cryptocurrency account. Since there is no central organization/agency to regulate cryptocurrency, there is no chance of recovery of stolen private keys.

Combatting cryptocurrency security risks

The cryptocurrency system has come a long way over the past few years. To protect yourself from cryptocurrency security threats, it is important to adopt best practices and invest in the right resources. Here are some effective measures you can take:

For crypto company owners

  • Focus on secure coding, agile testing, and auditing. Companies involved in cryptocurrency should consider penetration testing on their platforms and websites to ensure all vulnerabilities are identified.

  • Educate users through app-based campaigns or newsletters about the 'dos and don'ts' while using a cryptocurrency wallet or platform.

For users

  • Enable multi-factor authentication through biometrics, magic links, or OTPs.

  • Enable "Safe Browsing" on the browser by fostering "Enhanced protection." It automatically warns users if the website or platform has malicious files or adware.

  • Do not keep private keys in your systems (smartphones or PCs).

  • Install anti-malware to help protect yourself from crypto-malware and other malicious programs.

  • Do not open unknown emails, download attachments, or click links that could redirect you to other websites.

  • Thorough research before using any platform. Ensure the platform or app is legitimate.

Conclusion 

Cryptocurrency is an evolving system with immense potential. By adopting the security practices mentioned above, you can protect yourself from cryptocurrency security threats and keep your digital assets safe. If a hacker manages to get access to your funds, recovery becomes near impossible since there are no central organizations or agencies governing it. Therefore, investing in robust security protocols and adopting secure practices is the key to safeguarding your digital assets.

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