Cryptocurrency, often associated with “geeks” or those looking to raise cash quickly, has turned into a popular payment method. Photo: Reuters
INTERNATIONAL - Cryptocurrency, often associated with “geeks” or those looking to raise cash quickly, has turned into a popular payment method.

A recent report from Kaspersky Lab, says one in 10 people (13%) have now used it to make a purchase. But cybercriminals are also embracing this trend by targeting cryptocurrency exchanges and modifying old threats to attack investors. Thus people risk losing their savings stored in this unprotected technology, as hackers develop sophisticated techniques to access funds.

A growing number of businesses are now offering cryptocurrency as a payment method, with retailers and food outlets now accepting it. Even major sports teams are partnering with crypto-exchanges.

Yet, as people show interest in using cryptocurrency, their funds are vulnerable to being stolen from cryptocurrency wallets, insecure exchanges and Initial Coin Offerings (ICOs).

In some high-profile incidents sums of up to $530million (R7.4billion) worth of digital tokens have been stolen. Hackers can use a wide range of practices to steal funds from crypto wallets, cryptocurrency exchanges and ICOs.

High-profile cases - with 120000 bitcoins stolen from segregated customer wallets on Bitfinex four years ago; and when Coincheck was hacked for $530m last year - demonstrate the insecurity of these exchanges and the ease with which cybercriminals can access live networks.

If all the money in a cryptocurrency exchange is stolen, then it simply closes, and investors lose.

ICOs are particularly at risk because individuals who set them up often do not have any background or experience in cybersecurity. This leaves them unable to protect funds.

Ultimately, the cryptocurrency market still isn’t regulated and no risk assessment mechanisms are in place.

Vitaly Mzokov, head of Verification, Growth Centre at Kaspersky Lab said: “Despite a fall in cryptocurrency prices, there is still a strong desire for digital transactions. However, there are real dangers. There could be devastating financial consequences for consumers if funds are not secure. With hackers becoming more sophisticated in their attacks, cryptocurrency exchanges and ICOs are prime targets.”

Cybercriminals can steal substantial funds due to the lack of cybersecurity measures in place. “If something looks suspicious, do not make an investment.”

For consumers who want to use cryptocurrency, Kaspersky Lab recommends: Always verify a web wallet’s address and do not follow links to an online bank or web wallet.

Using cryptocurrency hardware wallets: double-check recipient addresses, the amount being sent, and the fee before sending a transaction.

Write down a mnemonic phrase to recover a crypto wallet if you lose it or forget your password.

Install a high-quality security solution to safeguard your devices.