Cryptocurrency and Crypto Attacks (and How Regulation Can Help)

1. Cryptocurrency and Crypto Attacks (and How Regulation Can Help)

2. Introduction : We’re just two months into 2018 and $2,653,302,364+ of real money has already been spent to buy virtual money. Cryptocurrencies — whether regulated or not — have buyers all over the world, even in countries where their status lies in the limbo. However, just like real money, virtual money is also being stolen. And just like real money investment scams, the virtual currency space, too, has its share of investment scams with cheats floating schemes promising lucrative returns and running away with all the money.

3. ICOs and the Disappearing Act ICOs (or Initial Coin Offerings) is a means of crowdfunding that allows new ventures/startups to raise capital without following the regulated processes and compliance needed by venture capitalists, stock exchanges, and banks.

4. Phishing and Virtual Currency Thefts When dealing with virtual currencies, customers face the same risks as they face when doing net banking. Cryptocurrency users are prone to all kinds of cyber attacks like phishing, password hacking, trojan software and others. IBM’s X-Force research group states how cyber criminals have modified TrickBot, a banking trojan, to target cryptocurrency trading platforms by redirecting the virtual currency to their wallets during transactions.

5. Cashing in on the Hype When a technology is so new and disruptive as blockchain, it creates hype. A stream of scamsters use nothing but this hype and lure unsuspecting victims into investing their money. The Suppoman scam is one such scam. A youtuber scammed hundreds of his viewers by promising information on a “secret ICO” if they bought one of his Udemy’s paid courses and joined his Facebook mastermind group. To join this group and get access to the password, the viewers were required to pay 10$.

6. The Regulatory Red Tape on Cryptocurrencies Treating cryptocurrency companies like any other financial institutions and forming regulations for the same will clamp down — if not eliminate — most of the different crypto attacks. Regulating to avoid tax evasion and ensure the money isn’t used for sponsoring shady activities: Subjecting cryptocurrency trading companies to stringent KYC, AML, user data privacy and other financial norms will help monitor the flow of fiat currency to crypto and vice-versa. This will also impose checks on issues like tax evasion.

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