In an era where the allure of cryptocurrencies captivates the imagination of the global market, the double-edged sword of the decentralised and unregulated nature of these digital assets presents opportunities and significant security challenges for businesses, says Carey van Vlaanderen, CEO of ESET Southern Africa.
“The core principles of cryptocurrency, decentralisation and lack of regulation, can be seen as both a blessing and a curse. The relative freedom comes at the cost of increased vulnerability to cyberattacks, where financial transactions, traditionally considered the epitome of security, can also serve as a refuge for criminal activity,” explains van Vlaanderen.
There have been numerous examples of financial heists since the first cryptocurrency, Bitcoin, was released as open-source software in 2009. In 2022 the Ronin Network, a cryptocurrency network focused on gaming, confirmed that a staggering $620 million had been lost. On the same day that the now infamous FTX declared bankruptcy under Sam Bankman-Fried, cybercriminals began stealing hundreds of millions of dollars from its coffers. In the Ronin Network case, the theft was attributed to the relaxing of security measures to accommodate an influx of players.
“In many cases, cryptocurrency heists and the accompanying scandals highlight the critical need for enhanced security protocols and serve as a stark reminder that security cannot be an afterthought. It is imperative for the crypto industry at large, and any business engaging in cryptocurrency, to adopt a security-first mindset, akin to traditional financial institutions, to protect investors’ assets effectively,” says van Vlaanderen.
As cryptocurrencies gain more mainstream acceptance, van Vlaanderen says the threat landscape evolves along with it, making understanding and mitigating risks through comprehensive cybersecurity strategies something businesses cannot delay. “Adopting a proactive approach to cybersecurity is not optional, but a necessity and should go beyond simply implementing security measures but weaving a fabric of security consciousness throughout an organisation.”
Key strategies include thorough risk assessments, regulatory compliance, employing encryption protocols, multi-factor authentication, and continuous transaction monitoring to detect and respond to threats promptly. In addition, blockchain technology which serves as the backbone of cryptocurrencies, offers significant security advantages. “Blockchain’s inherent security features, including its resistance to tampering and transparent verification processes, present a formidable defence against cyber threats. Even so, it should not be viewed as a silver bullet. Businesses should complement these features with a holistic cybersecurity strategy to effectively counter the sophisticated threats we face today,” notes van Vlaanderen.
She says cryptocurrency security encompasses a suite of solutions tailored to address the unique challenges of the digital asset ecosystem which include designing secure architectures, implementing effective wallet and key management practices, while also fostering employee awareness and training to mitigate human error. “In the cryptocurrency landscape, staying informed and prepared is key. The goal should be for businesses to empower themselves with the knowledge and tools to navigate this environment securely,” says van Vlaanderen.
As governments worldwide begin to introduce legislation aimed at increasing transparency and accountability, the integration of cybersecurity measures will become increasingly critical. “Embracing robust cybersecurity practices will not only protect against threats but also contribute to the stability and credibility of the cryptocurrency market,” adds van Vlaanderen. “We are likely to see more innovative cybersecurity solutions come to the fore that secure the digital economy and foster greater trust among users and investors in cryptocurrency.”
“By embracing rigorous cybersecurity measures and leveraging blockchain technology, businesses can navigate the intricacies of digital transactions while safeguarding their assets and reputation,” she says adding that businesses can harness the full potential of cryptocurrencies in a secure and resilient manner, ensuring a safer future for all stakeholders in the cryptocurrency space.