Cybersecurity Risk Vectors in Crypto
Cryptocurrencies are valuable, and they can be stolen. It is a fact that has been well-known in the cryptocurrency space for a while now. When cryptocurrencies were first introduced, they were touted as being “unstealable” because of how difficult it would be to transfer them from one person to another. However, as cybercrime evolved and advanced over time, hackers found ways to breach these supposedly impenetrable systems with relative ease. Despite this risk factor, many corporations continue to invest heavily in crypto-related startups that are targeted by these malicious actors.
Cryptocurrency exchanges are particularly vulnerable targets for hackers because they provide an accessible way for people to trade their digital assets with others. These exchanges have been hacked repeatedly over the past few years due to poor security measures and/or negligence on behalf of their administrators: Mt Gox lost 850,000 bitcoins during its 2011 hack; Bitfinex lost 120,000 bitcoins during its 2016 hack; and Coincheck lost 530 million dollars’ worth of NEM coins in 2018 due largely to human error rather than technical vulnerability (or at least so far). While these hacks pale in comparison with what could happen if even one nation-state actor got involved with cryptocurrency theft (think “Stuxnet”), they do serve as examples of how vulnerable cryptocurrencies can be when not properly protected by their owners or administrators.”
Crypto Exchanges and Companies
- First, crypto exchanges are a target for hackers. As the largest digital wallet holders in the world, they store an overwhelming amount of money that hackers would love to get their hands on. They also hold personal information about users who have made transactions through their platforms.
- Second, crypto companies are a target for hackers because most do not have good cybersecurity practices or policies in place to protect their users’ data from cybercriminals looking to steal private information and cause havoc on their networks. In fact, according to McAfee’s 2019 Threat Report , only 29% of companies surveyed said they tested their systems against advanced persistent threats (APTs) at least semi-annually as recommended by NIST Special Publication 800-171 Rev 1
- Thirdly and finally, many cryptocurrency exchanges don’t have any auditors reviewing them regularly; therefore it’s easy for malicious actors such as nation states or cybercriminals who want financial gain access them without being detected by anyone else except the owners themselves which can lead directly into another section below where I explain what types of attacks these criminals use against each other when they’re trying get money out of each other.
- Cryptocurrency exchanges are one of the most common targets for cybercriminals, and they are becoming an increasingly attractive target for nation states as well. Cryptocurrencies have become a form of digital cash that can be used to purchase goods and services from merchants who accept them as payment, or to transfer funds directly between individuals. Because they’re not tied to any central bank, cryptocurrencies aren’t regulated by governments or traditional financial systems which means users don’t have any legal protections if something goes wrong with their transaction.
Social Engineering Attacks
In a world where cryptocurrency is the currency of choice, social engineering attacks are the most common way to steal your funds.
Social Engineering Attacks – Social Engineering is an attack that relies on human interaction and manipulation to obtain information that would otherwise be unavailable or difficult to access. An example of a social engineering attack would be sending someone emails with malicious attachments or links to cause them to download malware onto their computer which gives hackers access to their system and personal information such as passwords or credit card numbers. To avoid these types of attacks it’s important not only not clicking on suspicious links in emails but also never downloading any attachments from emails unless you know exactly where they came from and what’s inside them!
Some other ways people have been scammed with social engineering techniques include having phone calls asking for usernames/passwords (the same ones used when entering bank accounts into 2FA systems). This happens because both sides think they’re talking with someone else (i’m sure you’ve seen this happen before). Another thing hackers might try doing is impersonating someone else through emailing sites pretending they need help logging into an account because their password was lost; once logged in using fake credentials they then use those credentials later down the line when accessing sensitive data such as banking accounts etc..
How Can We Protect Ourselves From This? – First off all don’t give out any personal info over email unless absolutely necessary! And even then always look up who’s sending that email first before replying back since there could be some shady individuals lurking around trying take advantage of others like yourself.”
The most common entry point for hackers is cryptocurrency wallets. There are two types of wallets:
- hot, or online, and
- cold, or offline.
Hot wallets allow you to make transactions quickly, but they have a high risk of being hacked due to their connection to the internet. Cold wallets are more secure because they aren’t connected to the internet and therefore can’t be hacked as easily by cybercriminals looking for vulnerable targets. However, cold wallet users will often pay higher transaction fees than people using hot wallets since there’s no way for miners to verify your account info from an unconnected device (this means you won’t be able to send money anywhere as quickly).
If your goal is simply to protect yourself from getting hacked while using cryptocurrencies, a cold wallet may be right for you! Just make sure it comes with two-factor authentication.
Proper cyber management of these crypto devices includes also the back up all private keys onto paper copies stored somewhere safe away from home where other people cannot get them
Reputational Risk for Crypto Counterparties
In the crypto currency ecosystem, counterparties are the people and companies you exchange with. The reputational risk of exchanges, companies and investors is high. The cybersecurity risks are multiplied in this environment because if you don’t take your role seriously as a party to transactions, you’re at risk of attack.
There can be dire consequences when parties do not take cybersecurity seriously enough in their roles as counterparties or exchanges within the crypto currency ecosystem
If you are in crypto then you need to be interested in the intersection of cybersecurity and cryptocurrency.
- Cyberattacks are a constant threat to cryptocurrency exchanges and investors. If you are interested in crypto, you should be interested in cybersecurity. Cybersecurity is one of the most important aspects of the blockchain industry, and it’s also one of the most misunderstood by newcomers.
- Social engineering attacks are among the most common ways that hackers steal your cryptocurrency or other sensitive data from you in order to access your accounts. This is often done by sending phishing emails or SMS messages claiming to be from a reputable company. The message requests that you click on a link or attachment, which can lead to malware being installed on your device and the theft of your private keys.
It’s important to recognize that cybersecurity risk is not just limited to crypto exchanges and companies. As we’ve seen with recent phishing attacks targeting cryptocurrency users, social engineering can be a powerful vector for attackers. And for investors who don’t have their own hardware wallet, there are plenty of mobile apps available that claim to offer secure storage solutions but don’t actually do anything except store your login credentials on their servers — which makes them ripe targets for cyber criminals!