Cryptocurrency Hack Attacks are a Growing Threat

Has Bitcoin Become Mainstream?

The lure of remarketing may kill anonymity in crypto-currency transactions.

Online shoppers paying with Bitcoin may have been expecting this crypto-currency to shield their identity. They may be disappointed to learn that merchants are not protecting their identity. In some cases, they are even selling it.

A recent Princeton University study revealed that Bitcoin transactions can be tracked through a combination of cookies, third party tracking software and merchant data. Some merchants are selling the information to third-parties including advertisers.

With transactions (apparently) routinely tracked, Bitcoin may now be less attractive to criminals and more attractive to legitimate businesses.

Regulators, investors and consumers have been skeptical about the safety of Bitcoin and other crypto-currencies because they can be used by criminals to purchase illegal goods, like drugs or weapons, or to launder money. It’s also the currency of choice for ransomware attacks including the Wanna Cry attack in May of 2017.

In fact, law enforcement now uses Bitcoin as a tool to prosecute criminals. “If you catch a dealer with drugs and cash on the street, you’ve caught them committing one crime,” says Sarah Meiklejohn, a computer scientist at University College London. “But if you catch people using something like Silk Road, you’ve uncovered their whole criminal history,” she says. “It’s like discovering their books.” (Silk Road was an online black market that was shut down in 2013.)

Cybersecurity presents a risk. 

Crypto-currency hack attacks are a growing threat. They have involved many crypto-currencies including Bitcoin, Ether, Ripple and Monero. Thousands of attacks have been reported to the FTC. Victims include prominent blockchain investors, early Bitcoin users and crypto-currency executives.

Joby Weeks, a Bitcoin entrepreneur, lost about a million dollars in virtual currency after his cell phone number was stolen. The attacker knew Week’s mobile number and he convinced a Verizon rep to switch Week’s account to the attacker’s mobile phone. If you have linked your crypto-currency account to your cell phone, you could be vulnerable to this type of attack. It only takes a few minutes for a criminal to empty your crypto-currency accounts once they take over your phone.

Will the FDIC or other insurers eventually get into the market of insuring crypto-currency bank accounts? 

As more legitimate businesses start to use crypto-currency, there may be more pressure to create protections for account holders. Account insurance could be one avenue for this. Central banks may also attempt to regulate crypto-currency markets. Many governments are still determining how they will govern Bitcoin transacations within their borders and the role of crypto-currencies in their economy.  After all, Bitcoin it is still primarily a currency speculators’ marketplace.

Stay tuned as we continue to watch the market for crypto-currencies, which today amazingly has a market value of about $150 billion, according to Coin Market Cap.

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