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Increased adoption of Bitcoin may mean an increase in hacks and theft

Key facts:
  • According to a study, Latin America is one of the regions with the highest adoption of bitcoin and cryptocurrencies

  • According to the study, 90% of attacks on DeFi target decentralized exchanges.

An analysis carried out by the cybersecurity company Kaspersky, determined how the current adoption of cryptocurrencies, with considerable growth in Latin America, may be driving new forms of scams or theft. This is due to the ease represented by the transfer of value using cryptoactive networks.

The study was led by Santiago Pontiroli, a security analyst at Kaspersky, and released via email on September 22. The study, in general, analyzes how cryptocurrencies and NFTs may be posing real loss threats, since, according to the report itself, the damages from thefts and hacks, in which crypto assets are involved, already exceed USD 100 billion.

Latin America, according to Pontiroli documents, has become a growth zone for the cryptocurrency ecosystem. The case of El Salvador stands out, where bitcoin was recently adopted as legal tender.

El Salvador became a milestone, being the first country in the world to accept Bitcoin as legal currency in its country. Source: Twitter / Nayib Bukele.

This growth in adoption could be motivating cybercriminals to increase their attacks. According to the study, in 2020, more than 360 thousand malicious files were analyzed per day, which represents an increase of 5.2% compared to 2018.

Security issues in NFTs

Decentralized finance (DeFi) and NFTs, along with the adoption of cryptocurrencies and tokens, have seen quite broad growth in the last year. However, their vulnerability lies directly in the smart contract in which they are programmed.

The cornerstone of these applications are ‘smart contracts’, pieces of code that run automatically when certain parameters are met, all without the intervention of third parties.

Santiago Pontiroli security analyst at Kaspersky.

Given that these are independent projects, without regulation and that depend almost exclusively on technological support, Pontiroli mentions that these can be victims of hacks that expose flaws within the protocol of the smart contract, which can end in massive theft of funds. This happened in the Origin Dollar case, cited by Pontiroli and reported by CriptoNoticias, whose hack ended in the loss of more than USD 7 million.

DeFi platforms, more precisely DEX (decentralized exchanges) have been the main victims of the attacks. According to data from CipherTrace, a crypto-asset transaction tracking platform, 90% of attacks in the cryptocurrency ecosystem tend to target DEX.

Security problems when storing bitcoin and cryptocurrencies

Pontiroli also dedicates part of the study to analyzing the way in which crypto assets are stored. Cryptocurrencies and tokens need to be “stored” in wallets or exchanges, although the latter can be considered third-party wallets.

The problem with this security model is that users are responsible for protecting their funds and. With increasingly novel forms of theft, it is difficult to list and warn about each of the scams that can end up violating a person’s cryptocurrencies.

Pontiroli’s recommendation may seem basic, but it is quite a powerful tool. It advises users to use strong passwords, composed of uppercase, lowercase, special characters, as well as the use, as far as possible, of two-factor authentication, and also to use hardware wallets.

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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