Risks associated with the transfer of sensitive data exist in any online environment. Established cryptocurrency platforms and exchanges apply a range of security measures to protect user data, as their reputation depends on it. The cryptocurrency industry has already experienced many negative moments in the relatively short time of its existence, and for many, the fear of becoming a victim of cybercriminals or scammers is too great to ignore. RBC Crypto.
As in the case of any other financial services, the transfer of personal data to a cryptocurrency exchange becomes a necessary step in order to gain access to the platform and its capabilities. Any traditional financial institutions also require the provision of personal data, and cryptocurrency services with a centralized form of management are no exception. As regulation in the industry increases, crypto services are also responsible for maintaining the privacy of their users’ personal information, further highlighting the importance of reputation and trust in the industry.
Cryptocurrency users really prefer to provide services with personal data to a minimum. This is due both to security issues (hacker attacks, transfer of data to third parties), and in general with the desire to maintain privacy in order 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 implementation, argues Taisiya Romanova, a crypto expert and author of the GFiS Channel telegram channel.
“The risks associated with this are typical for large services that, in order to save business, can transfer data to authorities or specialized bodies at their request. In some cases, companies may even refuse a legitimate request to delete a user’s personal data if this conflicts with anti-money laundering (AML) regulations,” the expert clarifies.
Leaks may well affect large banks or corporations. Security issues are relevant now for companies of any segment and level, Romanova adds, talking about the differences in the approach to data security in the crypto business and in the field of traditional finance. However, since crypto-currency services are even less regulated than companies from the traditional financial system, cases of abuse by crypto-services do occur due to relative impunity or terms of use drawn up against the client.
“Nevertheless, it is unprofitable for those services that are set to continue and grow their business to deliberately deceive users,” Romanova clarifies. — This will inevitably lead to reputational losses and may affect development. It is much more profitable to have a working business that brings a steady income.”
The world of cryptocurrencies is quite young, and there is a “rather narrow community” in it. If someone starts “not playing by the rules”, this immediately becomes known and they stop working with such services, Sergey Mendeleev, head of InDefi Bank, agrees. The sphere of finance is “extremely sensitive to reputation”, which is earned over the years, and can disappear in an instant.
“It is no coincidence that the exchanger can be removed from the aggregator just because of one justified complaint from the client, depriving it of traffic and the flow of users. It is very easy to get into the conditional black list, but it is almost impossible to get out of it, for this it is not enough to close all the pain points, you also need to re-establish trust by working honestly for a long time, ”Mendeleev explains.
Of course, not a single service aims to spoil relations with customers, adds Dmitry Machikhin, head of the BitOK service. Sometimes personal data is just a formality, for example, the requirements of a regulator. Companies in general are required to follow the rules for storing and working with such information, since the fines for violations are quite impressive. Any personal data can become an object of leakage, both external and internal, and there are enough such cases, and in this sense, the crypto business is not too different from the traditional one.
“If the goal of a hacker is to take possession of your funds, then he doesn’t care where to look for a vulnerability,” the expert comments.
“I don’t see any problems at all in sharing my data with someone,” says Mendeleev. “It won’t be difficult for attackers to get them anyway, but I don’t remember any cases of hacking crypto exchanges with downloading copies of customer passports. You should be more wary of password leaks, as most people use the same character sets and code words for different services.”
According to his observations, large crypto services are protected in much the same way as banking infrastructure, and “maybe even more seriously when it comes to storing funds.” The price of a mistake is “much higher and irrevocable.” If we analyze the 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 waste time and energy on hacking the customer database – attackers are “interested in stealing cryptocurrency, not passports.”
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