In August Cryptology CMO Herbert Sim visited Moscow, Russia where he was sharing on crypto security. Here are some insights:
Hack attacks in the crypto industry have become so common that news about another exchange hacking does not surprise the crypto community that has already experienced a lot. According to the report “Spam and phishing” in the second quarter of 2018 $2,3 bln was stolen. As for the global trend, scammers stole $ 1,2 bln in 2017 and $ 1,1 bln in the first half of 2018. It seems that the crypto community does not learn from its own mistakes.
Hackers are most likely to use phishing digital resources, fake ICOs, bogus accounts of famous personalities in social media (a chain of scam bots in Twitter), fake crypto wallets and exchanges. The topic of escaping the scammers’ tricks and modern technologies that digital asset exchanges are developing to provide their wallets security was covered by the Chief Marketing Officer of Cryptology Herbert Rafael Sim in his lecture on the blockchain conference CryptoBBQ held in Moscow last week.
He believes that every user should deal with two-factor authentication to secure his personal data; no clicking on the third party links, which may turn out to be malicious; being careful with cloud mining sites and avoiding pump-and-dump groups and HYIP&MLM projects.
Cloud mining can be an attractive alternative to purchasing mining farms and expensive high-capacity equipment. There are projects with working business models, which aim to generate profit in a long run. However, scam projects can be distinguished by promises of guaranteed income, lack of licenses and refusal to provide these documents, intrusive annoying advertising, etc. Moreover, cloud mining sites are prone to be scammed. In December 2017 a popular mining marketplace, NiceHash, lost more than 4700 bitcoins in a hack attack on its payment system. The losses amounted to more than $ 75 mln given the BitCoin exchange rate at that moment. The marketplace users found their e-wallets empty after a long website shutdown.
In order to avoid losses, Herbert Sim recommends not joining pump-and-dump trading groups and channels. The groups’ administration picks a certain cryptocurrency of low value and small perspectives and agitates other group members to buy it simultaneously to make its exchange rate rise. Right after the pump succeeds the dumping stage follows and group members sell the pumped currency on terms of an artificially inflated rate. Most of the times only channel administrators benefit from these fraudulent schemes.
At Cryptology we invest aggressively in industry-leading technology and practices to secure customers data and virtual currency assets, even as our investment and commitment to security go far beyond what the law requires.