LAS VEGAS (KLAS) — 8 News Now looks into the cyber risk of cryptocurrency and how to navigate through it all.
Lt. Allen Larsen with Metro Police describes what cryptocurrency is as interest continues to grow globally.
“It’s essentially a virtual asset, meaning it’s based on the blockchain, and a specific set of numbers in a specific order,” he said.
A specific cash value and widespread popularity have also led to a rise in crypto cyber risk.
“There’s a lot of very high risks associated with cryptocurrency, unlike banking institutions, there’s no FDIC insurance on crypto funds,” Lt. Larsen added.
How to regulate cryptocurrencies is being figured out, there’s no third-party watchdog.
“The safety of it really depends on who’s holding the cryptocurrency,” he tells 8 News Now.
Cybercriminals can essentially crash a party, that’s still being planned.
The crypto cyber risk involves phishing, malware, hacked trading platforms, and laundered money.
“One of the primary uses for cryptocurrency is by criminal elements,” Lt. Larsen said. “To be able to move those funds quickly, without any detection by investigative entities.”
When war breaks out, cryptocurrency is relied on to avoid sanctions and move money.
“Whenever there is war or any type of major conflict, the value of cryptocurrency generally spikes during those conflicts,” added Lt. Larsen.
He also tells 8 News Now about the upsides to cryptocurrency.
“If you want it to be private, and to be able to do quick transactions, you know without banking regulators, or the federal government, or somebody else being involved, I would say it can be a useful tool,” Lt. Larsen said.
To capitalize on this new opportunity, and stay cyber safe, Lt. Larsen advises those interested to look to the bigger outfits and to steer clear of the scammer, who wants to buy crypto for you.
“If it’s not a big-name cryptocurrency exchange, I would stay away from it,” Lt. Larsen said. “There’s a lot of scams out there, there’s a lot of people who say, oh, go through me and I’ll buy you bitcoin or Ethereum, but a lot of those people are scammers.”
He also warns of other ways crooks can target your hard-earned money.
“They might even create a wallet or an account that you can log in to be able to see your money, then when it comes time to pull your money out, now they’re trying to charge you a fee to pull your money out – and once you give them even more of your hard-earned cash, they disappear,” Lt. Larsen added.
For cryptocurrency investors prepare for inconsistencies when it comes to gains and losses.
“It can fluctuate wildly from day to day,” he added. “There is some opportunity there for some massive gains, but what most people don’t talk about is the massive losses that happen as well.”