How serious is cryptocurrencies security problem?
- Shannon Pepi
- Jan 23, 2018
- 1 min read
A December 2017 report, completed by Ernst & Young (EY) detail just how big of a security problem cryptocurrency is currently facing. Researchers for EY collected data on 372 different initial coin offerings (ICOs), between 2015 through to 2017 and discovered that over 10% of all ICO proceeds are stolen by hackers. What does that 10% mean in terms of dollar value? An incredible $1.5 million per month stolen by hackers. Additionally, hackers are also getting away with personal details - such as addresses, phone numbers, bank details and credit card numbers.
In the last five years, cryptocurrencies have exploded in popularity, but have largely been in circulation without regulation and safety nets. Combined with the enormous lack of the correct safeguards, cryptocurrencies and exchanges have been left wide open to hackers and theft on a large scale.
In the report, Ernst & Young state that phishing is the most popular tool used by hackers. "Hackers are attracted by the rush, absence of a centralized authority, blockchain transaction irreversibility and information chaos," they state, also mentioning that the frequency of attacks is on the rise.
Ernst & Youngs report strongly pushes the founders, investors and regulars need to be more transparent, diligent and need to collaborate on regulating cryptocurrencies. "Once new standards are in place that are accepted by all participants -- allowing for improved transparency, fraud prevention and legitimacy -- the protection of investors and users alike has a greater chance of success," Greg Cudahy, Ernst & Young's global technology, media and entertainment and telecommunications leader told CNET.
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