What are the major risks in Cryptocurrency Cybersecurity?

icon Posted by: Praveen Joshi
icon December 23, 2022

In Brief: 

Cryptocurrency and Cybersecurity

During the past decade, cryptocurrency was among the most revolutionary technological advancements. Although it started slow, crypto has shown an amazing growth rate in the last few years. There were only 66 types of cryptocurrencies available across the globe. According to the Statista reports, the number of cryptocurrencies you can now invest in reached around 10,397 in February 2022. The total infrastructure of any crypto platform is online. This makes it vulnerable to a wide range of cyber threats. However, cryptocurrencies are based on blockchain technology that is secure by default. But hackers always find their way around security mechanisms. Therefore, it is necessary to integrate adequately strong cybersecurity measures into the crypto platforms. 

100%

is the confidence towards cryptocurrency as a safe asset to invest in.

84%

of the total cryptocurrency market is occupied by the top 10 Cryptocurrencies.

127%

is the surge in trading volumes of crypto investment products in 2022.

67%

of millennials are investing in bitcoin considering it the safest cryptocurrency.

Cybersecurity Risks in Cryptocurrency 

We have already discussed that cryptocurrency is developed on the foundation of blockchain technology. And blockchain is a security mechanism in itself. But that does not guarantee the 100% safety of cryptocurrencies from the malicious intents of cyber criminals. Crypto can be considered as an extended aspect of your digital assets. However, the method like Application Penetration Testing that you use to protect your conventional digital assets won’t be equally effective here.  

You can secure your cryptocurrency through certain security measures. But you need to know about the risks first. The following are the top security risks in cryptocurrency: 

1. Phishing Attacks 

Phishing is a social engineering tactic that is used by cybercriminals to execute their malicious intent of stealing pertinent information from their victims. This information might include sensitive details like credit card numbers or login credentials of targeted individuals. Attackers can use phishing campaigns to steal funds from your crypto account. They do it strategically by faking to be a reliable and reputable entity. This helps them to successfully trick victims into clicking on a malicious link and giving them their credentials for the crypto wallet. Once hackers get the key information of your crypto account, they can easily perform unauthorized transactions through it for their benefit.   

2. Illegal Trading Platforms 

It has been a decade since cryptocurrencies have been to light. But these are still early days as most people are not quite familiar with the concept and how it functions. We are still witnessing the infancy stage of the trading platforms for cryptocurrency. Every day a new trading platform comes into the market. It is difficult to figure out which one is a true and genuine one. So, there are significant chances of falling into the trap of an illegitimate crypto trading platform. You might potentially end up being a victim of a multi-level marketing scam. Fraudulent activities such as hacking, or data breaches are the risks within plain sight.  

3. Compromised Registration Forms 

Usually, you need to go through a strict identity verification process on any cryptocurrency platform. A registration form is there to fill out in order to verify your details. However, this is for your verification only. There is nothing in your hands to verify the authenticity of the registration forms. It is quite possible that there is a malicious code injected in the form by attackers. They can hack the details and send the user’s information to a command-and-control (C&C) server. This information can further be used by them to sell in the black market or in any other way to make money.  

4. Lack of Regulation 

The reach of cryptocurrency is increasing, and the crypto market is growing bigger. But most of the crypto market is running without any regulatory body. Being decentralized in terms of regulation is what makes it both flexible as well as risky. Unlike any traditional financial institution, there are high chances of investors falling prey to fraud. Plus, they are left with very few mechanisms for attempting to recover lost funds. 

5. Third-Party Application Risks 

Most crypto applications are created by third-party service providers. They don’t usually manage the trading platforms you use. These applications help you to monitor crypto prices and calculate potential profits. Also, they have access to your sensitive information that can pose a potential risk to your security and privacy. This scenario creates a high chance of exposing your sensitive or protected information to others without your permission. However, Application Penetration Testing can help minimize this risk.  

Before You Go! 

  • Dealing with cybersecurity risks for cryptocurrency can be a tricky task if you do it by yourself.  
  • You can take help from professional services that offer Cyber Security Solutions in Dubai or anywhere else in the world. 

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