Understanding Crypto Risks and Best Practices for a Safe Investment
Cryptocurrency is becoming increasingly popular, but many individuals are unaware of the potential risks associated with using it.[0] According to a recent survey*, 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.[1] Virtual theft and scams were the two most commonly reported worries by survey respondents when it came to the potential drawbacks of using cryptocurrency, being cited by 27% and 26% respectively.[0] Consumers under the age of 35 are more aware of these threats than older consumers, indicating a decrease in awareness with age.[1]
The SEC has brought 127 enforcement actions related to cryptocurrency since its first action in 2013, including 82 litigations and 45 administrative proceedings against digital-asset market participants.[2] Of the 30 crypto-related enforcement actions issued in 2022, 14 involved initial coin offerings (ICOs), and over half (57%) of these ICO-related actions included a fraud allegation.[2] In 2022, the SEC initiated unprecedented charges in the cryptocurrency industry concerning insider trading and market manipulation.[2]
Application-specific integrated circuits (ASICs) are chipsets built to perform a specific task and are becoming more and more popular as companies look for ways to mine cryptocurrency that use less energy.[3] Other cryptocurrencies, such as Bitcoin Cash, are also gaining traction. Bitcoin Cash is a hard fork of Bitcoin that was created to decrease fees associated with Bitcoin transactions by increasing block size. It has also been designed to be more expendable than Bitcoin.[4]
Before trading cryptocurrency, it is important to understand how to interact with it, as well as the potential risks faced by cryptocurrency owners. Kaspersky is a global cybersecurity and specialized security solutions and services company that provides helpful tips to maximize the benefits of using cryptocurrency safely.[0] These tips include creating strong and unique passwords for each of your crypto accounts, avoiding phishing attacks, and never sharing your private keys.[0] It is also important to note that cryptocurrency is not considered as money or currency by key financial institutions, and is instead treated like shares and taxed accordingly.[5]
Finally, investments in cryptocurrency-based devices, cryptocurrencies, and digital assets have increased as a result of the sudden rise in Bitcoin’s value.[6] Investors should remain vigilant and familiar with cryptocurrency threats and best practices to keep their investments safe. The more you know about the cryptocurrency space, the better equipped you’ll be to make informed decisions.
0. “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
1. “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
2. “Cornerstone Research: SEC Tightens Cryptocurrency Enforcement” www.prweb.com, 31 Jan. 2023, https://www.prweb.com/releases/cornerstone_research_sec_tightens_cryptocurrency_enforcement/prweb19120222.htm
3. “Cryptocurrency Market Is Expected To Reach around USD 4.25” www.globenewswire.com, 31 Jan. 2023, https://www.globenewswire.com/en/news-release/2023/01/24/2594075/0/en/Cryptocurrency-Market-Is-Expected-To-Reach-around-USD-4-25-Billion-by-2022-Grow-at-a-CAGR-Of-12-2-during-Forecast-Period-2023-To-2030-Data-By-Contrive-Datum-Insights-Pvt-Ltd.html
4. “Cryptocurrency: An insider’s guide (free PDF) | TechRepublic” www.techrepublic.com, 31 Jan. 2023, https://www.techrepublic.com/resource-library/whitepapers/cryptocurrency-an-insider-s-guide-free-pdf-copy1/
5. “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
6. “United States Hardware Wallet Markets, Competition, Forecast …” www.businesswire.com, 31 Jan. 2023, https://www.businesswire.com/news/home/20230123005559/en/United-States-Hardware-Wallet-Markets-Competition-Forecast-Opportunities-2022-2028-Increasing-Investments-in-Cryptocurrency-Based-Devices-and-Increasing-Use-of-NFC—ResearchAndMarkets.com
