Digital currencies are becoming streamlined with the evolution of online services and products. To survive the market competition, businesses need to adopt modern means of providing services to their customers. With the coronavirus pandemic underway, cashless transactions have become a necessity. From performing micro-transactions on e-gaming platforms to carrying out peer-to-peer payments for goods, digital currencies are becoming increasingly popular.
Exponential Growth in the Market
Virtual currencies are the new normal in payment systems with the penetration of smartphone devices around the globe. Although most digital currencies are regulated by a central banking authority, the widely popular cryptocurrency is decentralized. During the COVID outbreak, the worldwide market for cryptocurrency valued at $979. 5 million in 2020, is estimated to arrive at a size of $1.4 billion by 2027. With more than 2000 cryptocurrencies existing in the market, their number is still growing.
Digital Currency Scams
Fraudsters and potential criminals are always on the move with their illicit motives, and the digital currency market is no different. The increasing popularity of bitcoin has created better opportunities for scammers to steal the identity of genuine users and take over their digital wallets. A staggering $4 billion was recorded in cryptocurrency scams, according to the Wall Street Journal in the year 2019. A few of the most common scams related to digital currencies are listed below:
Cryptojacking
Cybercriminals employ various hacking mechanisms to get into the system of the user and mine cryptocurrency from their e-wallet. This type of attack sneaks into the software and performs malicious tasks until symptoms like delayed operational times and reduced system productivity start to appear.
Fake Websites
Illegitimate platforms created using illegal means and ways are surfacing the digital currency market and consumers better watch out for these imposter websites. The next time you visit Amazon or Alibaba make sure the web address is authentic and the transaction page safe. Using a secure internet connection and a trusted website is a good bet when it comes to digital payments.
Malicious mobile Apps
Google and Apple have reported an increase in fake crypto apps surfacing their mobile applications stores. There are a number of reported incidents which are readily taken down by these tech giants but this does not guarantee they do not harm the community.
Email Scams
Your mailbox is the perfect spot for pesky fraudsters to send attractive offers and steal your personal identity. Phishing emails with amusing proposals and suspicious links often tend to gain access to your digital currency accounts and identity information.
What is KYC and how can it help?
Know Your Customer, better known as KYC is the ultimate method to guarantee if a customer is authentic or a potential criminal. Without proper frameworks to validate user identity over the internet, cybercrime cannot be mitigated. KYC offers robust solutions to safeguard customer identity by using government-issued documents, user’s facial features and other forms of consent verification.
Digital currency transactions could be carried out through a safe and secure channel once customers are verified over a KYC verification process. Even cryptocurrencies which are pseudonymous in nature could be safely carried out using robust KYC compliance regulations. This not only helps customers follow financial regulations but also business to stay compliant with Anti Money Laundering (AML) obligations.
