Cryptocurrency Industry Needs a Large-scale, Coordinated Education Initiative
The authorities of many countries blame digital assets for the fact that they are often used for illegal purposes - for money laundering, financing of terrorists and various criminal groups. The number of crimes using cryptocurrencies is growing every day.
According to a Chainalysis study, the cryptocurrency market reached a new record high in 2021, in which addresses associated with illegal activity received $14 billion during the year, compared to $7.8 billion in 2020. The main danger for the further development of cryptocurrencies is the fact that the number of scams using digital assets continues to grow as the adoption of cryptocurrencies increases around the world.
At the same time, as soon as users of digital assets lose a “significant” amount of money due to fraud or hacking, there is a high probability that they will stop working with the entire asset class — if not forever, then for a very long time.
The risk of possible loss drowns out the potential benefits of using cryptocurrencies and spoils the reputation of digital assets.
The popularity of cryptocurrencies and their easy accessibility attracts an increasing number of scammers. Moreover, knowledge of technology does not always save crypto holders from losses.
There is a possibility that almost every crypto trader and/or user will become a victim of ingenious criminals or hackers.
Even Vitalik Buterin, the co-founder of Ethereum, became a victim of fraud, which is described in the book The Cryptopians. The skill of criminals is constantly growing and improving. The number of crimes committed using cryptocurrencies is growing every year. One of these crimes is the theft of cryptocurrencies.
Thefts of cryptocurrencies have increased even more. In 2021, approximately $3.2 billion worth of cryptocurrencies were stolen, which is 516% more than in 2020. Approximately $2.3 billion of these funds, which is 72% of the 2021 total, were stolen from DeFi protocols.
The novelty of the technology and its prospects attracts a large number of users to the protocols and the number of blocked assets in DeFi continues to grow.
At the same time, there are a large number of vulnerabilities in DeFi protocols, which hackers actively use in accordance with the reports conducted.
The growing indicators associated with the criminal use of cryptocurrencies are of concern not only to government authorities and regulators, but also to ordinary crypto holders who are losing more and more of their assets.
And although no one is immune from crypto fraud, even experienced cryptocurrency users, most cryptocurrency crimes are related to unfamiliarity of technology, negligence or fear of missing out (FOMO) profits.
Criminals widely use elements of social engineering to find out user data. They constantly perfect their methods of deception.
The crypto community needs to unite to solve common tasks and goals in order to resist fraudsters and various kinds of criminals and make crypto technologies more secure.
Crypto needs a coordinated campaign funded by participants, which will not only make the cryptocurrency more secure, but also help ordinary users learn more about the technology.