Strike back: New technologies to secure crypto companies against cyber attacks
The rapid growth of the crypto industry has attracted increasing instances of cyberattacks, with one of the most notable being the case of Singapore-based Crypto.com which stole more than $ 31 million.
The cyber threats faced by crypto companies come not only from cybercriminals who act alone, but also from state-sponsored hackers, according to a joint cyber security advice issued by the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA) and the US Treasury Department. These agencies have warned cryptocurrency companies to watch out for attacks from North Korean state-sponsored hackers. With crypto being where the money is – online games, stack coins and crypto wallets – everything is fair game for hackers who exploit their weaknesses and try to hit the jackpot.
Consequences of cyber attacks
Cyber incidents, such as the one that Axie Infinity suffers from, underline the growing challenge of implementing design security in web3. The growing list of breaches stems in part from errors in writing web3 code, which undermines one of the biggest promises of blockchain – improved security. As a result, technology’s advancement toward conventional acceptance has been held back.
DeFi, which aims to offer an alternative to traditional financial systems, has become an attractive target for cyber attacks, thanks to billions of dollars that are locked into the various applications that are also largely operated autonomously. Such high-profile cyber incidents also make venture capitalists hesitate to invest in these platforms, as they highlight the underlying security vulnerabilities in blockchain services, especially with blockchain bridges. These recurring series of cyber incidents in the crypto industry act as a wake-up call for both investors and web3 companies. Prioritizing capital investments to secure their highly complex systems will be crucial, not only to protect against cybercriminals, but also to provide security for both users and investors in the platforms.
As new technologies continue to emerge, companies’ need for cyber security will only increase. Blockchain, cryptocurrencies, artificial intelligence and privacy technologies have since disrupted the threat landscape of economic crime, and facilitated new criminal methods as a result. In the dark web, which is used to facilitate cybercrime such as ransomware and fraud, bitcoin remains an important payment instrument. Furthermore, Fast Layer 2 payment, anonymously enhanced wallets and coins, and DeFi can also serve as criminal tools, thanks to the pseudo-anonymity they give their users. Last but not least, organizations need to be vigilant and protect their information against cyber fraud, as fines and legal issues result when sensitive material such as personal and financial information is stolen and destroyed.
In order to secure crypto companies against cyber attacks, it will be crucial to put in place adequate protection and train employees in proper cyber hygiene. However, despite the most advanced cyber security measures, a cyber attack can occur as long as an opportunity presents itself for hackers.
Defense against cyber attacks
The first layer of defense is always a robust operational security process through security-by-design, an approach that seeks to minimize system vulnerabilities and reduce the attack surface by designing and building security in each phase of the system development life cycle. In this regard, a third-party perspective may identify vulnerabilities that may have been missed by internal cybersecurity teams. We assume that the system can always be under attack and design it so that it quickly recovers and keeps the most sensitive data safe, with proper verification and testing performed before distribution instead of as a reflection of events that have already occurred.
The second layer of defense will be the company’s capacity to track and retrieve stolen proceeds or private keys from the dark web, as well as its ability to identify and apprehend perpetrators. In the wake of a cyber attack, it is crucial that companies respond by understanding how the cyber attack took place, how quickly hackers gain access to important and sensitive data sets and how easily accessible bank accounts are. The speed with which crypto companies can recover from a cyber attack will also depend on the company’s strategy for recovery and resilience.
The current trend of increasing globalization and transaction fragmentation has raised questions about how an information position can be maintained and how emerging technologies and solutions can be used to better secure financial systems. When it comes to financial crime, virtual asset intelligence – which includes red flag indicators against money laundering, collective bargaining, blockchain data analytics, dark web intelligence, smart analytics and AI – can be used to effectively extract strategic insights and operational perspectives from large, distributed datasets . Dark web intelligence, such as cryptocurrencies and IP addresses, as well as in-depth analysis of the relationship between cyberattacks and financial crime such as ransomware attacks, will also be the key to delivering better informed virtual asset intelligence positions to crypto companies.
A good intelligence position will be crucial to gain a better understanding of cybercriminals ‘modus operandi, and this will require threat intelligence feeds through dark cyber-surveillance, as well as analysis of cryptocurrencies, which will be the most important inputs for companies’ prevention and protection regimes. as well as their recovery and resilience strategies to avoid recurrence of such hacking incidents.
Strategies for recovery and resilience
High-profile cyber incidents, such as those experienced by Axie Infinity, Crypto.com and a number of others, have already weakened investor and venture capitalists’ confidence in the area. These incidents can also be devastating for companies, as revealed by the comment from DeFi Beanstalks developer that the funds for the project had been wiped out.
In order for companies to regain investor and consumer confidence, as well as continue to drive technological innovation in areas such as web3 and DeFi, they must not only increase investment in cyber security measures, but also put in place effective recovery and resilience strategies. While a robust cybersecurity regime can deter most hacking attempts, hackers are opportunistic about taking advantage of any vulnerabilities that are discovered. As such, a strong recovery and resilience strategy will ensure that crypto and DeFi companies are able to recover from hacking incidents with minimal disruption to operations, and reduce losses for their investors and users.
