22% of surveyed companies in the United States lost between $100,000 and $499,000 to cyber-attacks in 2022. That is only one segment, as 4% lost over a million dollars to cybercrime. So, how do cryptocurrencies fit into this menace?
The crypto world today is so different than it was, say, a decade ago. People have become aware of its potential, and many users troop in daily. Among them are those who seek to exploit its strengths to carry out cyber-attacks.
We must look at the following angles to understand how cryptocurrency affects cybersecurity:
- As a tool in the hands of cybercriminals
- As a security risk to those who use it
This is the exciting but shady tale of crypto in cybersecurity.
Data protection is a contested sector, with big firms investing millions of dollars. Still, cybercriminals keep finding loopholes in the system. Some could be due to preventable causes like burnout among cybersecurity employees.
One would think that the arrival of blockchain technology would boost corporate security. Although blockchain is a secure network by design, cybercriminals can exploit it. Those who play with crypto know that the best minds always win – winning the fight against cybercriminals involves knowing how cryptocurrency is aiding them.
With that said, here is how digital currencies impact cybersecurity:
Malware and ransomware attacks are not new in cybersecurity. What is new is the direction for ransom demands. Using cryptos gives attackers an edge.
The benefits of cryptocurrency include the following:
- The relative ease in moving large amounts of money.
There are other advantages, but these two give the most significant edge to attackers. Cybercriminals now request payments in crypto, unlike before crypto when they used shell accounts or cash transactions. The anonymous nature of the blockchain makes tracking difficult.
These inherent properties have resulted in the adoption of cryptocurrencies for ransom. The National Cyber Investigative Joint Task Force estimated that about $144.35 million in bitcoin was paid as ransomware between 2013 and 2019. That shows how emboldened cybercriminals have become in their crimes.
Being untraceable does not do anybody but the criminals a favor. Law enforcement agencies are unable to identify the perpetrators. The opposite would be true if they used regular bank accounts.
Why can’t the government go after the hackers’ wallets? The U.S. and other governments worldwide want more oversight. Still, keeping cryptocurrency in check is not easy. That is because the entire structure’s design is to avoid government interference.
Centralized exchanges might have more oversight, but cybercriminals rarely use them for transactions. Instead, they patronize less-known and less-regulated cryptocurrency exchanges.
In a nutshell, cryptocurrencies, through no fault of their own, promote cyber-attacks. The chances of recovering such funds are zero.
Corporations and businesses that use cryptocurrencies introduce new risks to their cybersecurity. Apart from the mainstream attacks, it opens up a new dimension.
Fighting crimes on this front means identifying key areas susceptible to attacks. They include the following:
- Phishing for crypto wallet credentials.
- Hacking of trading or exchange platforms.
- Stealing of information through compromised registration forms.
- Malware attacks.
Cybercriminals can spoof applications and lure users into depositing large amounts of cryptocurrency. We saw this approach when Bitkeep users lost $8 million through a hacked APK file.
Spoofed applications can escape mainstream detection. As a result, you might interact with a hacked platform without knowing.
A newer impact of digital currency in cybersecurity is cryptojacking (illegal mining). Malicious mining is a rising threat. Reports in Q1 2022 showed that over 500,000 users received malicious mining software.
Hackers can load this malicious software into legitimate mining programs. As a result, users will not know that they are being cryptojacked.
The ultimate safety approach is using high-quality cybersecurity systems. Even so, you can still do the following at a basic level:
- Learn about cryptocurrency.
- Update your security and firewall programs.
- Double-check crypto applications.
- Work with licensed trading platforms.
Cryptocurrencies present a new cybersecurity threat. Its anonymous nature and large transaction capabilities have made it attractive to cybercriminals. We keep seeing companies report ransomware payments in Bitcoin and other digital currencies.
Being untraceable and working on a decentralized network makes government oversight nearly impossible. As a result, money lost through this channel is rarely recovered.
Cryptojacking is becoming increasingly common with Monero becoming the most popular cryptocurrency mined illegally. It is a new cybersecurity threat born from the impact of digital currencies.
Using enterprise-level cybersecurity systems and experts is the best approach. Nonetheless, we must remain vigilant at all times. Conduct basic checks on digital currency applications before using them.