Risks associated with transmitting sensitive data exist in any online environment. Proven cryptocurrency platforms and exchanges apply a range of security measures to protect user data, as their reputation depends on it. In its relatively short existence, the cryptocurrency industry has already experienced a lot of negative moments, and for many, the fear of becoming a victim of cybercriminals or fraudsters is too great to ignore.
As with any other financial services, giving personal information to a cryptocurrency exchange becomes a necessary step to gain access to the platform and its features. Any traditional financial institution also requires personal data, and centrally managed cryptocurrency services are no exception. As the industry becomes more regulated, cryptocurrency services are also responsible for keeping their users’ personal information private, further emphasizing the importance of reputation and trust in the industry.
Cryptocurrency users do prefer to share personal information with services as little as possible. This is related both to security issues (hacker attacks, data transfer to third parties) and in general to the desire for privacy to avoid questions about income and the origin of funds. The issue of privacy is one of the ideological aspects of cryptocurrency, and many users advocate its enforcement.
Leaks could very well affect large banks or corporations. Security issues are relevant now for companies of any segment and level, the expert adds, arguing about the differences in the approach to data security in the crypto-business and traditional finance. However, since cryptocurrency services are even less regulated than companies from the traditional financial system, cases of abuse by cryptoservices do occur because of the relative impunity or terms of use drawn up not in favor of the client.
“Nevertheless, those services that are set up to continue and grow their business are not profitable to deliberately deceive users,” the expert specifies. – It will inevitably lead to reputational losses and can affect development. It’s much more profitable to have a working business which brings in a steady income”.
“It is no accident that an exchanger can be removed from the aggregator just because of one legitimate customer complaint, depriving it of traffic and user flow. To get on the conditional blacklist is very easy, and to get out of it is virtually unrealistic, it is not enough to close all the pain points, you still need to rebuild trust by working honestly for a long time.
Of course, no service is aimed at spoiling customer relations, the expert adds. Sometimes personal data is just a formality, such as regulatory requirements. Companies in general are obliged to follow the rules for storing and handling such information, as the penalties for violations are quite impressive. Any personal data can be the object of a leak, both external and internal, and there are plenty of such cases, and in this sense, the crypto-business is not too different from the traditional one.
“If an attacker’s goal is to get hold of your funds, he doesn’t care where to look for the vulnerability,” the expert commented.
“I don’t see a problem with sharing your data with anyone at all. – It is not difficult for criminals to get them in any case, but I don’t remember cases of hacking cryptocurrency exchanges with uploading copies of clients’ passports. We should be more afraid of password leaks, because most people use the same character sets and code words for different services”.
According to his observations, large cryptoservices are about as secure as the banking infrastructure, and “maybe even more so when it comes to the storage of funds.” The cost of an error is “much higher and more irretrievable”. If we analyze leaks of Russian services, it turns out that their main source is not banks, but third-party contractors or, for example, delivery services. No one, according to the expert, will spend time and effort on hacking customer databases – attackers are “interested in stealing cryptocurrency, not passports”.