As Cryptocurrency Values Increase, So Does Cybercrime

As Cryptocurrency Values Increase, So Does Cybercrime

September 24, 2019 Business Insurance and Risk Management, The Beacon Blog 0 Comments

The market for cryptocurrency continues to grow. Nobl Insurance held a telephone survey in August 2019 suggesting 16 million Americans own cryptocurrency and 11.7 million are considering buying it in the next twelve months.With an average investment of $6,000, the U.S. cyyptocurrency market is over $100 billion with a projected $74 billion increase in twelve months.

On the other side of the (crypto)coin, CipherTrace’s 2nd quarter 2019 Cyrptocurrency Anti-Money Laundering Report suggests global cybercrime has increased by over 300% to $4.26 billion. If this trend continues, one third of the world’s cryptocurrency will be stolen by 2023, and if nothing is done the entire amount will be gone by 2028.

While 65% of those in the sample with over $50,000 in digital assets were very concerned about losing them, 48% of small investors with less than $1,000 in assets are not concerned about hacking. According to research by Clovr, almost 80% of respondents considered cryptocurrency a positive investment. However, even sophisticated investors have fallen victim to cybercrime.

Insurance is available for cybercrime, but there are concerns especially about ransomware insurance that it perpetuates the problem by rewarding criminals. (The relationship between crime and insurance is a subject for another discussion.) Other ways to combat crime use technology. Moving Target Defense makes changes to computer systems such as IP addresses to decrease the likelihood of a successful attack. Biometric security is another defense.Users need to take responsibility for their own security: Check website addresses. Only log in to secure websites. Don’t use public Wi-Fi for financial transactions. Use two factor authentication.

About the Author

Harry Cylinder

Harry Cylinder, CPCU, ARM has spent nearly fifty years in the insurance industry, the majority of the time as a consultant. He has been employed by The Beacon Group of Companies since 2008, specializing in the review and analysis of property and casualty coverage forms. Mr. Cylinder has been reviewing policy forms as they have evolved over the past decades. In 2008 he published an article in the CPCU Journal which was the first description of cyber insurance coverage for a general insurance audience. Since that time he has regularly written on cyber and other topics for The Beacon Companies’ blog.