Maximizing the Benefits of Using Cryptocurrency Safely

The cryptocurrency market has been rapidly growing since the introduction of Bitcoin in 2009.^[0] Cryptocurrency has become an increasingly popular investment option, with many people around the world now owning some form of digital currency. However, despite the growing popularity of cryptocurrency, a recent survey* has revealed that a significant proportion of individuals are unaware of the potential threats faced by cryptocurrency owners.^[1]

The survey revealed that only 25 percent of respondents felt extremely or very well informed about the potential risks of using cryptocurrency, while 23 percent had no information at all.^[2] Decreasing awareness of these threats is seen with age, particularly among consumers under 35 who are more informed.^[2] Virtual theft and scams were cited as the two biggest concerns among survey respondents when asked about the negative aspects of using cryptocurrency, with 27% and 26% respectively.^[1]

The survey also found that half of respondents have been affected by cryptocurrency crime in some way, revealing the wide range of criminal activities in the field.^[1] Forty-nine percent of those surveyed were unconvinced of the efficacy of existing protection systems for cryptocurrency, and 40 percent of cryptocurrency owners did not think the existing measures were adequate.^[2]

The U.S. Securities and Exchange Commission (SEC) has been sharpening its focus on cryptocurrency lending and trading platforms and decentralized finance platforms, as noted by Chair Gensler.^[3] This could bring about greater implementation of rules and regulations by the SEC’s Crypto Assets and Cyber Unit, which has recently grown its staff to probe into breaches of securities laws in the crypto realm.^[3] Since 2013, the SEC has brought 127 enforcement actions, including 82 litigation actions and 45 administrative proceedings against digital-asset market participants.^[3]

To maximize the benefits of using cryptocurrency safely, Kaspersky experts recommend creating strong and unique passwords for each of your crypto accounts, avoiding phishing attacks, and never sharing your private keys.^[1] When it comes to tax implications, cryptocurrencies are generally treated like shares and will be taxed accordingly.^[4]

The main defining feature of cryptocurrencies is that they are usually part of a decentralised network that uses blockchain technology and therefore do not come under the influence of any central authority.^[5] Blockchain is fundamental to Bitcoin’s appeal as a decentralized database, which can’t be controlled by any one person or group.^[6]

By understanding the potential risks of using cryptocurrency and taking the necessary steps to protect your digital assets, you can maximize the benefits of using cryptocurrency safely.^[7]

0. “Cryptocurrency mining, which relies on abundant power, expanding …” nonpareilonline.com, 31 Jan. 2023, https://nonpareilonline.com/business/cryptocurrency-mining-which-relies-on-abundant-power-expanding-in-iowa/article_17151507-5a07-5398-a13d-971d92691f5b.html

1. “Kaspersky survey: half of users hit by crypto cybercrime, one in four …” usa.kaspersky.com, 31 Jan. 2023, https://usa.kaspersky.com/about/press-releases/2023_kaspersky-survey-half-of-users-hit-by-crypto-cybercrime-one-in-four-unaware-of-crypto-risks

2. “Kaspersky survey: half of users hit by crypto cybercrime, one-in-four …” www.kaspersky.com, 31 Jan. 2023, https://www.kaspersky.com/about/press-releases/2023_kaspersky-survey-half-of-users-hit-by-crypto-cybercrime-one-in-four-unaware-of-crypto-risks

3. “SEC ramped up cryptocurrency enforcement in 2022, report shows …” www.pionline.com, 31 Jan. 2023, https://www.pionline.com/cryptocurrency/sec-ramped-cryptocurrency-enforcement-2022-report-shows

4. “Things to know about your cryptocurrency at tax time | Money …” www.yaktrinews.com, 31 Jan. 2023, https://www.yaktrinews.com/news/money/things-to-know-about-your-cryptocurrency-at-tax-time/article_c865112f-71e1-5020-bb14-07c518ac9288.html

5. “How to invest in Cryptocurrency UK | Money Guru” www.moneyguru.com, 31 Jan. 2023, https://www.moneyguru.com/insights/how-to-invest-in-cryptocurrency-uk

6. “The dirty secrets of cryptocurrency explained | Stuff.co.nz” www.stuff.co.nz, 31 Jan. 2023, https://www.stuff.co.nz/environment/climate-news/130736196/the-dirty-secrets-of-cryptocurrency-explained

7. “Buying Cryptocurrency with Digital Currencies (Altcoins) – Paxful …” paxful.zendesk.com, 31 Jan. 2023, https://paxful.zendesk.com/hc/en-us/articles/360013668993-Buying-Cryptocurrency-with-Digital-Currencies-Altcoins-