Your Key to Financial Security

The value surrounding digital assets is still a highly debated topic. Prices of digital assets, such as Bitcoin, have both soared and dwindled over the past few years. One thing that you could certainly bet your retirement money on is that digital asset-focused crime is bound to break new highs.


Theft and exit scams are abundant


CipherTrace reported a 1.7 billion dollar loss due to digital asset crime. And, whilst that may sound like a lot, 2019 almost makes that number sound insignificant. In the first 9 months of this year, crime-related losses soared to $4.4 billion.


The last few months haven’t been exempt from this behavior. Direct your attention to a specific type of crime that seems to be abundant in the digital asset space. No, not hacks or any of those crimes you typically think of when it comes to internet crimes but rather planned crime by trusted organizations.


PlusToken’s $3 billion Ponzi


One example of such a case of misplaced trust is the Ponzi scheme regarding PlusToken. PlusToken was a South-Korean company that offered a cryptocurrency wallet service and an investment program. This investment program promised high returns and, like a typical Ponzi does offer rewards for recruiting new users. This was enough to fool an estimated 3 million people worldwide and steal approximately $2.9 billion.
https://cointelegraph.com/news/plustoken-effect-alleged-asian-exit-scam-to-blame-for-market-decline


IDAX exit scam


A more recent example is the disappearance of the CEO the IDAX. Around the end of November, many users started noticing problems regarding withdrawals. IDAX quickly dismissed worries as the problems were supposedly related to congestion on their native network.


However, it quickly turned out to be more than that. It seems that the CEO of the exchange had gone missing. There seems to be ill intent involved as operations were shut down in China and deposits and withdrawals were disabled. While this story is still ongoing, IDAX issues the following statement.


IDAX Global CEO has gone missing with unknown cause and IDAX Global staffs were out of touch with IDAX Global CEO. For this reason, access to the cold wallet which is stored almost all cryptocurrency balances on IDAX has been restricted so in effect, deposit/withdrawal service cannot be provided.
https://www.ccn.com/crypto-exchange-idax-missing-ceo-exit-scam/



The value of control


What these events show is that although digital assets were born from a desire to be trustless, trust is very much a real thing we give out every day. We trust exchanges to not just complete a transaction but to hold our money, like a bank. And while it is often ‘sort of safe’ to give this trust, it wasn’t fine for the millions of users affected by the previously mentioned ordeals. It isn’t fine for you to do so either.


A lot of user funds are being held on third party services, such as exchanges and wallets. And keep in mind that these companies aren’t regulated enough, by far, to be able to provide these services. Their infrastructure isn’t as secure as that of banks, their employees aren’t as vetted and they are often situated in countries where rules and regulations are a bit softer.


This also shows the value of non-custodial exchanges. Whilst we are still looking for the perfect non-custodial model, for now, it means that the company you deal with should not hold the funds at all beyond the point of providing the service they are offering. And whilst it is comfortable to not have to move your funds every time, we strongly encourage you to opt for the safer option.


If you compliment that behavior with secure storage methods such as a hardware wallet, like Bitfi, you can almost entirely mitigate the risk posed by these problems. And it goes further than your financial security. If we were all to hold our keys, it would become less profitable for criminals to take advantage of users. And less crime means a happier market.


Our next steps to help you become more secure


At Vertbase we are exploring ways in which we can enable users, even more, to protect their wealth with a minimal amount of trust. Of course, we never hold any funds longer than we have to and execute transactions instantly, but we are looking to make that process even better. We are close to releasing an app that should make it even easier to control your own money safely. More on that soon!

COMMENT

14

razeiv Thapa
05 Dec

This is the another fear factor of crypto world yet we trust them and they vice versa.

11

j.toons .
05 Dec

I don't just understand the tech behind cybercrime...will it ever end? people keep coming with huge ideas on stealing from the masses ..technology increases and cyber crime increases too

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