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Cryptocurrency and its associated risks
Cryptocurrency and its associated risks
Time icon 9 March 2018, 10:03 am

Security experts are warning that cryptocurrency is just as vulnerable to hackers as any of your regular digital devices. Virtual currencies such as Bitcoin, Ripple, Dash, Litecoin and Ethereum are increasingly becoming popular. However, the fact that they are unregulated and highly volatile makes them prime targets for criminals to exploit.


Risks associated with Cryptocurrency

This hugely limits its use as a currency for performing transactions. The cryptocurrency market is rife with manipulation and it is unknown who owns virtual currencies. The huge price swings make the holders of the currency a lucrative target for criminal elements. A report conducted by Ernst and Young that analysed 372 initial Bitcoin offerings between 2015 and 2017, showed that as much as $1.5 million was being stolen every month. This is a very huge sum of lost funds especially since transactions performed with cryptocurrency means are not reversible.

These risks are some of the reasons why the EU is looking towards regulation options unless these risks are mitigated. Cryptocurrencies are also expected to feature heavily when finance ministers from the G20 countries meet this month in Buenos Aires. Some of the concerns they are expected to discuss is the potential use of virtual currencies in illegal activities such as terrorism, money laundering and drug trade among others.


What you can done for protection

The main tool that hackers use is a phishing email to gain access to virtual currency storage systems. IBM's X-Force has pointed to the TrickBot malware as one of the most used Bitcoin hijacking malware. It works by accessing your log-in information so hackers can steal your bitcoins or even purchase more by stealing your credit card information. It is thus recommended not to open email or links you do not trust. You should also purchase bitcoins from credible sources and always ensure your computer security software is active and up to date.