Just How Big a Problem Is Cryptocurrency Theft?Adam Gardiner
When famed bank robber Willie Sutton was asked why he robbed banks he replied, “Because that’s where the money is.” With a financial system that is increasingly electronic, the money is more and more often no longer stored in banks, instead it’s stored online. So it’s no surprise that criminals continue to go to where the money is, using a variety of techniques to try to steal online wealth from individuals and institutions.
With the rise of cryptocurrency and its increasing popularity, more and more criminals are turning their sights towards the cryptocurrency world. That is especially problematic for cryptocurrency owners who don’t take the proper actions to secure their cryptocurrency assets. Cybercriminals use all sorts of methods to steal cryptocurrencies, from brute force hacking to phishing to identity theft. In one recently publicized case, a cryptocurrency owner is accusing AT&T of providing hackers with the information they needed to steal $24 million in cryptocurrencies.
Because of that threat of theft, many investors are understandably worried about the safety of their investments. The perceived high risk of investing in Bitcoin and cryptocurrencies is one of the most important factors, if not the primary factor, behind investors deciding not to engage in cryptocurrencies. But how prevalent is cryptocurrency theft really?
Russian security firm Kaspersky Labs estimates that hackers exploiting the popularity of initial coin offerings (ICOs) made off with about $2.3 million in investor funds in the second quarter of this year. That may sound like a lot, until you realize that ICOs pulled in $8.3 billion in funding in Q2. That’s a loss of about 0.03%. Compare that to the average shrink (theft) rate in retail stores of 1.44% and you can see that cryptocurrencies are about 50 times safer than physical goods.
That’s not to say that investors shouldn’t be concerned about theft, as the threat is always there and no one should be blasé about security. But taking basic steps such as storing Bitcoin and cryptocurrency assets in hard wallets can go a long way towards securing your cryptocurrency assets. Investment vehicles such as Bitcoin IRAs are another solid choice, as the custodians who manage those assets take numerous steps to ensure the safety of their investors’ funds. As with storing any valuable asset, a little common sense and a few basic security procedures can go a long way towards keeping your money safe.