Along with the development of blockchain and the increasingly intensive integration of cryptocurrencies into everyday use, hackers’ creativity is also increasing, developing several new tools to rob their victims. Recent cases are associated with a coronavirus pandemic. This is not a sophisticated scam, but common extortion, where bitcoin is a simple means of collecting fuel. The FBI has seen an increase in threats against infected victims and their families.
Cryptocurrencies are commonly used for crime-related transactions, as evidenced by DeepDotWeb’s criminal operations. The most common ways are, for example, to buy and sell drugs or weapons through the so-called Dark Web (black market on the Internet) or to launder money. Leasing servers are also used to commit cybercrime. Raising funds to support terrorist activity is no exception, not to mention various extortion schemes similar to those associated with the COVID-19 pandemic.
For example, in July 2020, cryptocurrencies were used for mass fraud through the accounts of celebrities, including Elon Musk, whose bulletin board published a post with the following content: “Because of COVID-19, I feel the need to share. I will double any BTC payment that arrives at my BTC address within the next hour. Good luck and take care of yourself.” Similar tweets have appeared on the accounts of Jeff Bezos, Bill Gates, and other celebrities. Shortly afterward, however, information was released that it was a fraud.
The number of “Crypto hackers” is continuously growing
In October 2020, the Cyber-Digital Task Force issued a report stating that, despite the undeniable benefits of cryptocurrencies for the human population, this new method of payment plays a significant role in the most critical criminal and transnational threats.
According to crypto-intelligence company CipherTrace, more than $ 4.5 billion was lost in cryptocurrencies in 2019, precisely through theft or fraud. To illustrate, this is double that of 2018, and the numbers are expected to be even higher this year. Yesterday’s figures speak of $ 1.4 billion in the first five months of 2020 alone.
The fact that the blockchain is used globally and allows payments between continents in just a few seconds is complicated by the authorities to fight hackers. Adding decentralization and increasing owners’ anonymity takes this to simplify criminal activities to an entirely different level.
Stick to verified exchanges
In the history of cryptocurrencies, we find several fraudulent exchanges that “only” abused inexperienced investors. An example is BitKRX, which presented itself as part of the largest trading platform. In 2017, the South Korean tax authorities found out that it robbed people of money. To avoid falling victim to such similar scams as well, choose only known and verified bitcoin exchanges and forums where you can obtain the necessary information about false news.
Do not underestimate the method of storage
As with any property, cryptocurrencies require security against theft. This topic is significantly underestimated for newcomers. They incorrectly assume that they will keep their cryptocurrencies on the stock market until one day they decide to sell them. But the problem with holding cryptocurrencies in this way is that stock exchanges can not only be hacked but can also go bankrupt. In 2016, almost 120,000 bitcoins disappeared from the Bitfinex exchange. Another sad example of the loss of cryptocurrencies is the collapse of the Canadian stock exchange Cryptopia. According to available information, most retail investors are said to hold cryptocurrencies on the stock exchange.
Safety first, with cryptocurrency hackers
The basic rule of protection is not to keep cryptocurrencies directly on the stock exchange or in the exchange office because this means that they are still under the platform’s administration, which may be the subject of hackers. On the contrary, a suitable way to protect your investment from possible attacks is to keep it in wallets, for which the owner generates his private key, the so-called “seed”. It usually contains 12 to 24 words that need to be written down and hidden well. But beware, by no means in digital form.