There has been debate on the future of cryptocurrency for a long time now. Last year, people lost over $1 billion worth of cryptocurrency in theft from different currency exchanges. Earlier this year, Cryptopia – a New Zealand-based exchange – was hacked and cybercriminals stole over $3.6 million. Cryptocurrency is not regulated, which is why it is not exactly what people might call a safe investment.
Issues in the Crypto Space
There are some issues – security and regulation issues – in the crypto industry. There is obviously the risk of hacks of cryptocurrency exchanges by cybercriminals, but there are other risks as well. For instance, in February, the Canada-based exchange QuadrigaCX went offline after reports of death of its founder Gerald Cotten went viral.
According to reports, the CEO died in India in December. The death certificate was issued by the Indian government and obtained by CoinDesk. The death of Cotten, who was the only custodian of the cold storage wallets of the exchange, led to the end of the exchange and customer hopes as well. This is just one of the many cases where crypto exchanges failed their customers, causing concern for many investors.
In 2017, a South Korea-based exchange, Youbit, filed for bankruptcy due to lack of security and continuous breaches by hackers. Further, there is a massive debate on what crypto actually is – a currency, investment, security or property? The IRS considers it property, the Securities and Exchange Commission treats it as security, and the Financial Crimes Enforcement Network considers Bitcoin (a very popular cryptocurrency) as a currency.
Future of crypto may be good
It would be wrong to see only the demerits of crypto when exchanges are coming up with changes to enhance their security like use of Two Factor Authentication (2FA), offline storage, and insurance.
New players working to innovate crypto security and reliability may bring a brighter future for crypto.