Blockchain is a technology to ensure that crypto-assets are completely independent of external regulators. A special registry records and stores all information about customers’ wallets and their contents. This technology guarantees the safety of cryptocurrency. But even despite the high level of protection, even despite the high level of protection, there are a vast number of nuances to be aware of when it comes to blockchain. These details allow fraudsters to use the features of the technology as pressure points on the owner of a wallet with assets. As with anything, it is important to do your research on the subject and stay up to date with the latest news.
So what threats can consumers face in this case? Let’s take a look at a few of the most spread ones:
- Technical threats — in the case of blockchain, the owner of the wallet is given a special private cryptographic key. Whoever loses it will no longer have access to the wallet. If this key appears to be handled by a fraudster, then the chances for him/her to instantly withdraw all the available funds in the account are super high. Attackers come up with new tricks to get this private key, such as virus attacks or phishing sites.
- Legal fraud — fraudsters may demand to prove compliance with European personal data protection law and blackmail the company by turning to the regulator. Another way is to initiate various cases, filing complaints to the regulatory authorities in the countries where your company does business. In this case, the best way to self-protect from fraudsters is to hire experienced lawyers.
- Artificial transactions — this type of fraud can safely be called the most dangerous. Here, the scammers imitate a full-fledged financial transaction. The main goal of fraudsters is not to fulfill their part of the deal when the client has already made the promised transaction. It is necessary to carefully monitor every stage of the transaction because not all countries where blockchain works allow applying to the court to recover assets.
What Security Measures Should Be Followed?
Depending on the type of fraud, there are also special methods to help fight and prevent actions aimed at stealing cryptocurrency from wallets. Here is what experts recommend to do:
- have qualified lawyers on staff or go to a company with extensive experience in the legal field;
- use escrow services, i.e. trusted intermediaries, for transactions this is necessary if there is uncertainty about the counterparty);
- know the exact information about the client, so no one can challenge the financial transactions carried out with bank cards;
- before cooperating, don’t hesitate to request proof of ownership of the account and cryptocurrency assets;
- not to trust cryptographic keys to unfamiliar people and not to install unknown software on personal computers.
For those who want to learn more about methods to protect crypto investments from theft, we recommend going to brokers-news.com and reading corresponding articles on the topic.
You may be interested in: Ways to Keep Your Cryptocurrency Safe