The fast expansion of digital technologies has contributed to the boom of cryptocurrencies over the past year. Though, this awoke the necessities for further steps that need to be taken in shaping this growing market to address the emerging regulatory gaps and the opening that cryptocurrencies create for fraud, money laundering, and other illicit practices.

Before further evaluating this topic, let us describe to you very simply what is the Bitcoin an electronic wallet. Yes you might know how to trade and how to earn or withdraw money, but the more you know about certain field the more is the possibility to understand the structure and make more predictions.

So there are some terms that you have to keep in mind while operating in the crypto world and market.

Cryptocurrency – a mixture of digital assets in which encryption techniques are used to regulate the generation units of currency and verify the transfer of funds.

Blockchain – Is a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing blocks are recorded and added to it in chronological order. Each computer connected to the network gets a copy of the blockchain.

E-wallet – an electronic encrypted system that stores personal and payment information used for online transactions.

Mining – is the process of adding transaction records to Bitcoin’s public ledger of past transactions, and a “mining rig” is a colloquial metaphor for a single computer system that performs the necessary computations for “mining”.

Applicant Tracking System (ATS) – also called a candidate management system, is a software Whales – are individuals that have large cryptocurrency holdings. They are able to swing the market by manipulating the price of a cryptocurrency. They do this by means of “buy and sell walls.” The biggest reason why this sort of asset price manipulation is possible is due to the lack of position price limits/fees on many cryptocurrency trading platforms.

Initial coin offering (ICO) – is a controversial means of crowdfunding centered around cryptocurrency, which can be a source of capital for startup companies.

How Is It Relevant?

What is cryptocurrency: 21st-century wonder – or the money of the future?

Few people know, but cryptocurrencies emerged as a side product of another invention. Satoshi Nakamoto, the enigmatic inventor of Bitcoin, in his announcement of Bitcoin in late 2008, Satoshi said he developed “A Peer-to-Peer Electronic Cash System”. Let‘s have a look at the mechanism ruling the databases of cryptocurrencies. A cryptocurrency like Bitcoin consists of a network of peers. Every peer has a record of the complete history of all transactions and thus of the balance of every account.

A transaction is a file that says, “Bob gives X Bitcoin to Alice“ and is signed by Bob‘s private key. After signed, a transaction is broadcast in the network, sent from one peer to every other peer. The transaction is known almost immediately by the whole network. But only after a specific amount of time it gets confirmed, which is a critical concept in cryptocurrencies. When a transaction is confirmed, it can no longer be reversed as it is part of an immutable record of historical transactions: of the so-called blockchain.

Only miners can confirm transactions as it’s their job in a cryptocurrency-network. They take transactions, stamp them as legit and spread them in the network. It has become part of the blockchain. For this job, the miners get rewarded with a token of the cryptocurrency, for example with Bitcoins. Principally everybody can be a miner. Since a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. So, Satoshi set the rule that the miners need to invest some work of their computers to qualify for this task. In Bitcoin, it is based on the SHA 256 Hash algorithm.

While quite a bit of emphasis has been given to the reasonableness of the value of the cryptocurrencies, and the regulatory oversight on the offering of such cryptocurrencies to the public, ICO, the risks of market abuse have been far less discussed, not to say properly dealt with. The latest plans are from the European Commission which has set a directive for the European Parliament and European Council to make amendments. This is in order to ‘further step up the fight against the financing of terrorism’. Gaps still exist in the oversight of the many financial means used by terrorists, from cash and trade in cultural artifacts to virtual currencies and anonymous prepaid cards.

This proposal seeks to address balancing the need to increase security with the need to protect fundamental rights, including data protection, and economic freedoms. Cryptocurrency trading platforms constantly have to improve their security framework in order to stay ahead of hackers and thieves. It is vital that key stakeholders in the market continue to work on efforts to combat these issues.

Do we have answers?

Bitcoin remittance has emerged, and the Bitcoin using darknets of cybercrime are flourishing. More and more companies discover the power of Smart Contracts or token on Ethereum, the first real-world application of blockchain technologies emerge, and with them come increasing number of frauds and scams. What measures could be taken, ensure greater credibility and accountability in the crypto world?

By far the biggest issue in the cryptocurrency market is excessive volatility. The prices of cryptocurrencies on exchange platforms fluctuate dramatically over a short period of time. There are a number of reasons that contribute to the excessive volatility in the market, but perhaps the biggest contributor is the activity of “whales”. Considering the high volatility of the crypto field, what can be done to ensure greater stability, limiting large movements on the market?

From the day of its inception, the cryptocurrency market has been beset by the activities of hackers and cybercriminals. There have been a number of high-profile cryptocurrency hacks and heists that have resulted in millions of dollars being stolen. In the aftermath of these hacks, the price of particular cryptocurrencies has dropped considerably. What precautionary measures can traders and platform operators take, ensure safety, while maintaining a balance between security and efficiency?

Some Of The Stakeholders

Investors – An investor is a person that allocates capital with the expectation of a future financial return.

European Union – A political union, often called the EU. Based on the Maastricht Treaty, it envisions the eventual establishment of common economic, foreign, security, and justice policies.

European Commission (EC) - concerns itself with international crimes; money laundering, tax evasion, and terrorism. The EC has broad authority to regulate cryptocurrencies. Most regulatory measures taken by the EC or the MS are enforced by national regulatory authorities, such as the Financial Conduct Authority (FCA).

The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees securities transactions, activities of financial professionals and mutual fund trading to prevent fraud and intentional deception.

Actions Instead Of Words

The trade of cryptocurrencies falls neatly under the jurisdiction of the Securities Exchange Commission (SEC). The SEC decided to list the exchange of cryptocurrencies as an ‘alternative trading system.’ According to Investopedia, an alternative trading system is, “…One that is not regulated as an exchange but is a venue for matching the buy and sell orders of its subscribers.”

The Commission proposes to amend Article 2 of the 4AMLD to add virtual currency exchange platforms and custodian wallet providers to the list of obliged entities. In respect of designing providers of exchange services between virtual currencies and fiat currencies as obliged entities, the proposed amendments respect the proportionality principle. In order to allow competent authorities to monitor suspicious transactions with virtual currencies while preserving the innovative advances offered by such currencies, it is appropriate to define all gatekeepers, that control access to virtual currencies, as obliged entities under the 4AMLD, exchange platforms and wallet providers in particular. With regard to improving the detection of suspicious virtual currency transactions, six regulatory options were examined. Bringing virtual currency exchange platforms, putting users under the directive and allowing more time to consider an option. In many ways, these things would actually benefit cryptocurrency traders. It would force the exchanges to be more transparent in their dealings and would probably help provide some level of ‘security’ and safety to the investment world that didn’t exist prior. Thus, all these things potentially represent major wins for the crypto-world at large.

With the general topic being acknowledged, there are some other things that users and customers can take into consideration for additional safety matters.

Physical storage

Crypto hardware wallets are by far the safest way to store your digital assets. A hardware wallet is just like the ordinary hardware device for the computers, a physical device that stores your user’s private keys inside of an impenetrable circuit and allows you to sign transactions with a single click.

So close but so far

Many mistakes are made by the users themselves while sharing too much private information with others. Do not store your private keys online and do not share them with others as once you share it you lose your privacy and can be defined as a target for being hacked.

Use 2FA works best

An extra level of security is never a bad idea, by using two-factor authentication (2FA). Two Factor authentication is when you need two different methods — usually two different devices — to access your accounts.

With greater security in place, hackers will move on to easier targets. When you enable 2FA for any site, it is extremely important that you keep a copy of the seed (secret code) that you use to enable 2FA in a secure place. Almost every modern smartphone offers you this verification way. Though, whatever you do, do not incorporate SMS 2 Factor Authentication (2FA) into anything you do. Anyone using SMS 2FA is a ticking time bomb to get hacked.

It’s all about passwords – make them hard

When creating a wallet or cryptocurrency exchange account, you always need to use an extremely secure password. While creating your password, try a combination of everything that comes to your mind, being it low or capital letters, question marks or numbers. Also, when you have done so, keep your passwords in a password manager, which is an encrypted database that is protected by a single password. And there you go with unique passwords for everything. Now, when you have passwords, do not forget them!

Even while you can’t stop a natural disaster from coming, you can protect your funds against one. Print all of your 2FA backup codes, password manager emergency kits, and hardware wallet recovery sentences. Then, place these items (along with paper wallets and other crypto planning documents) into a safe and fireproof place.

Regular Checkups

When’s the last time you did an audit all of your crypto accounts, wallets, logins, and services? If you can’t remember – the time has come!

A thorough audit allows you to visualize the sheer number of services that you use and the different accounts that you own. And the more you use, the more steps you’ll need to take in order to cleanse and secure your crypto.

Like we always say in crypto, trust but always verify. After your audit is complete, use it as a guide to determine if your tools are still reliable. Make check-ups on brand reputation, transparency, rates, benefits, and methodology.

Forget about past

Close any old exchange accounts, empty your unused wallets, and get rid of any crypto tools that you no longer need – or use. Don’t forget to delete all unloved crypto apps from your phone, tablet, and computer.

Drop it (like it’s Hot)

Move any crypto that you are not actively trading out of exchange-based hot wallets and into more secure wallets like software, desktop or mobile wallets, or the one we have mentioned previously a hardware device. These types of (hot) wallets are still vulnerable but can be a more secure option. Exchange hacks are real; better to be safe than sorry.

This is especially necessary if you are you holding large amounts of crypto for the long-term. It’s time to move any funds off of any hot wallets and into cold storage. With your private keys stored safely offline, you’ll rest easy with a hardware wallet.

R.I.P

Just like any other investment, you’ll want your loved ones to have access to your crypto after you’re gone and we will all go, so sad but it is true. Include access to your recovery seed in your will. You want to feel as secure as possible, but don’t forget to plan for any eventuality. You can read online about multiple cases of people who died and did not leave their passphrase or recovery seed accessible to their families.

Down & Verify

Make sure all words are spelled correctly and are in the correct order. Then triple-check and test it with a small number of funds. But remember not to do it online, on your phone, on your computer, no taking photos/screenshot, do not mention is in an email.

PIN PON

We recommend a pin that’s 6–9 digits. This should be obvious, but please don’t use important dates that are easy to guess — such as your birthday, or the number of your kids or anniversary date. Use fresh address for every transaction, with the exception of Ethereum, every blockchain allows for this. This practice keeps you more secure because it keeps you more anonymous.

Common scam

A very common scam technique used by hackers is creating a fake, identical version of the exchange or web wallet page they use and emailing the link to the victim, usually with a convincing message that convinces them to log in and take some kind of action instantly. A lot of people access these sites, enter their data and the hackers take that data and oh well, hack you.

To avoid phishing, always check if the link showing in your browser perfectly matches the one of your exchange or web wallet.

Keep it safe

Make sure you have updated antivirus and firewall enabled. Don’t install any software you’re not entirely sure about the safety. And of course, never download any suspicious attachments and make sure to research about the reputation of software you’re about to install.

It’s crucial that you never tell anyone how many assets you hold. This is especially true when talking with strangers at blockchain tech conferences, cryptocurrency meetups, and social media and especially when you want to bost.

Can work well without publicity

Wifi hosts can direct your browser to any page, which can be, sometimes, a mimic version of your exchange or wallet. They can also collect data transmitted through the network which, in case, includes the password you typed. If you need to access your wallet from a public WiFi, use a VPN.

Informed means armed! Make sure to be updated about the ongoing cycles and it will be good if you share some of the valuable and new information with your friends and family, in the end, sharing is caring!

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