According to cybersecurity company Darktrace, cryptocurrency attackers aiming to steal crypto-assets through hacking are on the rise. Darktrace reports a 78% increase in threats relating to crypto-jacking and 1,313 crypto-mining issues worldwide from May-January 2019. The problem is particularly prevalent in Asia-pacific regions which have experienced 17% higher rates of crypto-malware incidents compared to the rest of the world. With such increased threat, the cybersecurity industry is growing exponentially, and therefore represents a significant opportunity to invest in cybersecurity stocks.
Research from Global Market Insights recently reported the cybersecurity market could grow from £120 billion a year to over £300 billion by 2024, representing an annual market growth rate of around 12%. Stocks in this sector are therefore worth keeping an eye on.
Cryptocurrency trading platforms are a key target, and one of the most common ways cyber criminals target is via malware attacks. Criminals aim to steal access to crypto wallets and keys through tricking users into giving their credentials, sometimes via a cloned site. When the victim inputs their details, they believe they are accessing the crypto currency trading platform, when they are actually passing the data on to thieves.
The attackers change their modus operandi regularly to make it harder to trace their activity. Crypto-currency is attractive to criminals as it can be used anonymously for transactions on the dark web. Those trying to defend their organisations are finding it challenging to keep up with the myriad ways of attacking them, despite increasing investment.
Although individuals are targeted, it is the crypto-currency exchanges themselves that are most vulnerable, and some have even had to shut down as a result of huge losses linked to cyber-attacks. Around 33% of bitcoin platforms have been hacked, according to data from the Department of Homeland Security, and Tokyo’s Mt. Gox exchange had $350m of Bitcoin stolen in 2014. As cryptocurrency platforms are not protected in the way that banks are, they and their victims have no regulatory body protecting them or limiting any loss of their crypto-assets.
Unfortunately, some cryptocurrency exchanges have left themselves vulnerable to attacks by lax security methods and compromising access to their security keys and wallets. By allowing third parties to manage keys and storing keys and wallets on hard drives in a well-known directory, some exchanges have made life too easy for thieves.
With such increased risks, Artificial Intelligence (AI) is now considered an essential component for organisations in staying one step ahead of the hackers. AI is adept at ‘learning’ what normal activity looks like, and therefore can quickly spot when abnormal activity occurs.
Wallets for storing cryptocurrency can be either ‘hot wallets’ (stored online) or ‘cold wallets’ (stored offline). The hot wallets are at greater risk of cybersecurity threats, and users tend to sacrifice security for convenience, particularly if private keys are stored in unencrypted and well-known locations. Cold wallets are stored offline therefore more secure as they are harder for criminals to access.
If you are looking to invest in cybersecurity stocks, now could be a good time, as the market is certainly burgeoning. As criminals keep finding ever-more sophisticated means of hacking, particularly where cryptocurrency is concerned, the cybersecurity market shows no signs of slowing down any time soon.
Founder Dinis Guarda
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