The number of worldwide Bitcoin daily transactions reached 400,000 in January 2021.
Cryptocurrencies such as Bitcoin are empowering cyber criminals to find new ways to carry out online attacks and commit fraudulent activities.
Here is everything you need to know about Bitcoin cyber crime as a business owner and the risks to your company and its employees if you decide to hold or trade digital currencies.
Why do cyber criminals use Bitcoin?
Digital currencies such as Bitcoin have no physical assets to give it value, and unlike normal currency, it’s not regulated by a bank. Cryptocurrency can be easily transferred from one person to another, making it an attractive currency for cyber criminals. Converting, sending and receiving Bitcoin doesn’t require a legal name or address, meaning that the hacker can stay anonymous.
Is Bitcoin legal and safe?
UK cryptocurrencies regulations allow users to buy and sell cryptocurrencies, but trading of cryptocurrency derivatives is banned. Bitcoin is unregulated and untraceable, making it of interest to several authorities such as tax and law enforcement.
Bitcoin has been linked to illegal happenings on the dark web such as using the currency to buy drugs.
Can Bitcoin be stolen?
Blockchain technology is used to run the Bitcoin network, making it difficult to hack but not impossible. There have been no recordings of the network being hacked since it started in 2009, however there are some potential security issues with the Bitcoin trading process.
There is no way to retrieve lost or stolen bitcoins, meaning your initial investment is at risk.
The risks of Bitcoin cyber crime and digital currencies
The Bitcoin market is unpredictable, which makes it high-risk for users. If business owners or employees hold or trade Bitcoin in their spare time, there are some risks to be aware of.
- Anyone with an internet connection can access cryptocurrencies such as Bitcoin. They are not restricted to certain countries and can be bought or sold 24 hours a day all over the world. Unrestricted access significantly increases the risk of a cyber attack to try and access your digital currency, which is stored in an online wallet.
- The value of Bitcoin may decrease or even crash after purchasing your bitcoins or fluctuate dramatically.
- Bitcoin is unregulated by governments or banks.
- Bitcoin traders are anonymous, making it easier for cyber criminals to get away with attacks on individuals or businesses that use Bitcoin.
- If somebody discovers the private key needed to access your bitcoins, you will lose them.
- The lack of security surrounding Bitcoin creates a risk for investors.
Where Bitcoin currency is stored is a target for the following types of cyber attacks:
Cryptojacking: cybercriminals send a malicious link or attachment to gain access to a computer to mine cryptocurrency and extract it from the user’s funds. Hackers can target individuals or even large organisations to attempt cryptojacking. The malware used to carry out this type of attack will slow down the infected computers.
Phishing: campaigns on trading platforms are designed to steal the user’s credentials so that scammers can then use them to ask for a ransom.
Hacking: cybercriminals attempt to hack currency trading platforms to steal funds.
Fraud: a user’s information could be stolen and sold to the black market.
Malware: cryptocurrency-related malware enters a computer to steal sensitive information and cryptocurrencies from an online wallet.
Alternative types of cryptocurrencies
Firms should also be aware of the following widely used digital currencies, which pose the same risks as Bitcoin:
- Litecoin (LTC).
- Zcash (ZEC).
- Ripple (XRP).
- Monero (XMR).
- Ethereum (ETH).
Protect your firm with cyber crypto security protocols
Incorporating the different types of Bitcoin cyber crime into your organisation’s security awareness training is key to making employees aware of the risks involved with buying and selling cryptocurrency.
As Bitcoin and other cryptocurrencies rise in popularity, some countries are considering introducing regulations to try and monitor its usage. Some large companies such as Tesla have recently suspended purchases made using Bitcoin due to its environmental concerns. The value of Bitcoin dropped by 10% following the announcement, demonstrating how volatile the currency is.
At CBSIT, we stay ahead of the latest online threats so we can help protect your organisation against them. Get in touch to discuss our IT services.