The Massive Scope of Cryptocurrency Fraud and Scams

• September 23, 2019
• by:  RKN Global 
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Cryptocurrency fraud and scams may hit $4.3 billion in 2019

A blockchain security company, CipherTrace, reported on the large scale of cryptocurrency scams and hacks in the past several years.   These included over $125 million in stolen cryptocurrencies in the 2^nd quarter of 2019, and $227 million lost to hacking in the first half of 2019.  It also included other scams, thefts and misappropriations totaling as much as $3.1 billion dollars.

On the heels of this comes a theft of $2.9 billion in deposits in an alleged scam involving a cryptocurrency exchange and wallet provider called PlusToken.   While six suspects allegedly affiliated with the scam have been arrested by Chinese police, the main operators of the scam are still out and running.  A loss of $2.9 billion would constitute the largest cryptocurrency exit scam to date.

CipherTrace estimated that cryptocurrency fraud and scams may reach $4.3 billion this year.

The Conditions for Fraud and Scams

As in all areas, criminals are attracted to opportunity and are deterred by risk.  The world of cryptocurrency is new, exciting and largely unregulated.  Investors don’t fully understand the product, and legal and technological protections are few.  This provides opportunity.

Similarly, the lack of strong regulatory schema worldwide, the proliferation of cryptocurrencies, ICOs, and exchanges, and the still not-fully-developed ability of law enforcement to catch the perpetrators, combine to minimize the risks to those who want to perpetrate cryptocurrency-related scams and crimes.

These factors make the circumstances ripe for cryptocurrency-related crime.

The Trend towards Transparency and Control

• September 9, 2019
• by:  RKN Global 
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Control of Personal Data

New fields often develop in stages.   A few years ago, cryptocurrency made its grand entrance, tokens proliferated, and speculation ran high in an unregulated wild-west.  As the industry continues in its growth, regulators are beginning to step in and many see the need for order.

A similar phenomenon happened in social media.  For years, users shared data with social media companies without a real awareness of what those companies were doing with their data.  Much ink has been spilled about how the price we pay for the convenience of social media is our very privacy.

As data has grown to be one of the most valuable commodities of our era, its unbridled collection and use by social media companies has begun to attract public scrutiny.  We are just beginning to understand the importance of giving people control of their own data.

The growing awareness of the importance of control of personal data has reached the point that even big social media companies are beginning to respond.

Example: Control Over Personal Data on Facebook

For example, Facebook is tentatively rolling out an “Off-Facebook Activity” feature, which it claims will give users better control over some of their data which Facebook controls.  In particular, the feature refers to data shared with Facebook by other companies which Facebook can use to identify its own users.

To illustrate, imagine a shoe company sends Facebook information that someone browsed its website from a particular device.  Facebook then scans its databases and identifies that the individual attached to that device is one of its users.  It can then send more shoe-related ads to that user.

The “Off-Facebook Activity” feature is supposed to allow users to see which companies have sent identifying data about them to Facebook which Facebook has subsequently linked to their account.  It further enables users to disconnect the data from their personal account.

As a result, Facebook will no longer use the “shoe-store—user” connection to tailor ads towards the user, but will rely on more generic ads.

Regardless of how meaningful a nod it is to consumer privacy and control of data, Facebook’s new product certainly reflects the zeitgeist of the times:  Users’ control of their own personal data is important.

The Need for Cyber-Security Professionals

• September 3, 2019
• by:  RKN Global 
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The Importance of Cyber-Security

It is no longer possible to ignore cyber-security.  The risk of cyber attacks is very real and affects millions of businesses. There is not a day that goes by without a hack. In many cases, victimized companies do not have the important security tools necessary to prevent it or reduce its impact.

Cyber-attacks can lead to both financial and reputational losses, even to the point of shutting a company down. The public healthcare IT systems of Singapore, for example, suffered a cyber-attack in 2018 which compromised the sensitive and personal data of over 160,000 patients. There is not a single developing or developed country that has not been affected by a cyber-attack. Cyber security is not a luxury, it is a necessity.

In Light of the Need for Cyber-Security Professionals, Who Will Work in Cyber-Security?

One cyber-security expert, Dr. Magda Chelly, explained the across-the-board need for cyber-security professionals.  Until recently, the demand for cyber security services was not as great as it is now. Companies were more interested in IT, CRMs and digitalization.  As a result, new graduates went to pursue careers in other cyber fields, which is why there has been a shortage of cyber-security professionals. As a result, the shortage of cyber-security professionals will likely continue until 2028.

Chelly explained that until a few years ago, cyber-security required primarily technical skills, but now companies look for skills like incident and crisis management, security management, and threat and vulnerability assessment. Furthermore, while industry-recognized certifications like CSSP or CISSP certifications are important, real-life hacking experience can be invaluable.