Most people no longer think of cryptocurrency as science fiction, with investors and wannabe investors developing more of an interest in this promising field. However, the growing crypto market also attracts sophisticated cybercriminals looking to illegally increase their wealth.
The blockchain data firm Chainalysis estimates that illegal cryptocurrency transfers hit a new all-time high of $14 billion in 2021, up from $7.8 billion in 2020.
Many people just getting started with crypto are taking their first steps cautiously for fear of being scammed or hacked, which is unfortunately possible, even if you follow all the security rules. Is there a way to break this vicious cycle? Yes. And it’s surprisingly straightforward.
Crypto firms can contribute to a brighter future without cybercrime if they come together and give up the "it's just business" attitude. They can increase their commitment to the ethical principles of honesty and justice, thereby enhancing crypto security overall.
Learn how ChangeNOW, a cryptocurrency exchange and processing platform, is working to keep cryptocurrency users safe from cybercriminals.
One of ChangeNOW’s major goals is to promote mass crypto adoption. The dark side of crypto is its connection with scammers and hackers, and this is a major hindrance to its wider acceptance.
ChangeNOW has a successful track record of combating illicit activities associated with digital currencies, causing a headache for bad actors. There are a number of AML measures in place at ChangeNOW designed to detect fraud and weed out suspicious transactions. Security reasons prevent it from divulging its exact KYT, KYC, and KYB systems but what it can disclose is that it uses both internal and external AML-compliance providers to ensure no fraudulent activity slips through the cracks.
Since its inception, ChangeNOW has recovered over $16,500,000 in lost or stolen funds as part of its broader responsibility policy.
In November 2021, it returned 600,000 MATIC coins to Eterbase, a Bratislava-based exchange that was hacked in 2020 and lost approximately $5.4 million in cryptocurrency on the day of the hack. Hackers attempted to liquidate the funds through ChangeNOW's swap platform but the funds were frozen by its AML system.
Another example is ChangeNOW’s return of 45,505 COMP coins to Compound Finance that it had lost due to a platform distribution malfunction in September 2021. An exchange transaction that consisted of mistakenly drained COMP tokens was caught by the ChangeNOW risk management system. ChangeNOW identified the user initiating the transaction as one of its clients and asked the user to return the tokens to Compound. Compound CEO Robert Leshner offered all returned tokens a 10% white-hat reward for being an ethical customer. The customer complied and refused to keep it.
Also in 2019, ChangeNOW detected suspicious transactions linked to the GateHub hack that lead to the loss of about $13 million worth of EOS and $6.2 million worth of XRP. ChangeNOW was one of the crypto exchange services used by hackers to liquidate the stolen funds. ChangeNOW's risk management system stopped suspicious EOS and XRP transactions after being alerted to the hack and retrieved around half a million dollars in crypto.
Often, it's not that easy to do the right thing but when you have a goal in mind and commit to it, you'll reap much greater rewards in the end. This is exactly what happened in early 2021 when the DOGE craze swept the crypto world and ChangeNOW temporarily had to shut down exchange operations due to the enormous volume of people storming to swap their crypto. Although DOGE rates had changed dramatically when it resumed operations, its team decided to keep all transactions at a fixed rate so that users would not lose money. The incident resulted in significant losses for ChangeNOW but it still provided fair exchanges for its customers.
These are just a few examples of how ChangeNOW intervenes when illegal or unfair activities occur on its platform.
“The crypto industry isn't a place for dirty money, illegal operations, or shady business schemes and we hold this as a core belief at ChangeNOW. Despite the crypto community's collective efforts, scams and hacks still plague the market, casting a shadow over the entire industry. Still, we’re confident that there will be no scams in crypto's future. We hope to achieve this and urge other crypto firms to do the same," ChangeNOW’s PR Head Mike Ermolaev said.
NB! This text has been first published on FXStreet.