Bitcoin: cryptocurrency plummeted below $ 35,000, ransomware attacks on the rise

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Cybercrime:

The topic of cybersecurity is no longer just an issue for governments and the military, but has also arrived in everyday company life.

Bitcoin claims in the millions by criminals are increasing

Photo: KACPER PEMPEL / REUTERS

The increasing cyber attacks on companies as well as the fear of inflation on the capital market have again weighed heavily on the crypto currency Bitcoin this week. While the world's most important cyber currency was still trading above the US $ 40,000 mark on Monday, it fell back below the US $ 35,000 mark at times over the weekend. With a loss of more than 10 percent, it is approaching its four-week low. The news that the Spanish bank Banco Bilbao (BBVA) wants to enable Bitcoin trading for all of its customers in Switzerland and that El Salvador is accepting Bitcoin as a general means of payment did not support the price of cryptocurrencies.

More serious is the fact that the Bank for International Settlements has classified Bitcoin as the "highest risk class" - and that the reputation of crypto currencies is suffering from the rapidly increasing cybercrime. Bitcoin is a popular means of payment for cyber criminals: if hackers break into a company network and paralyze business processes, they often demand a ransom in the form of Bitcoin. In the latest ransomware attack on the US company Colonial Pipeline, the group paid 75 Bitcoin ransom to regain control of the company's operations. While the FBI urges companies not to pay ransoms in the event of hacking attacks, a debate has raged in the US about whether such payments may be tax-deductible.

Bitcoin as the preferred currency for cyber criminals: The entire crypto market is suffering as a result.

Especially since cyber crime has now become an issue for every single company - and is changing the world of work.

In the past, governments, state and military institutions were the main targets of cyber attacks.

In the meantime, ransomware attacks have become multi-billion dollar business of criminals operating worldwide: According to data from Palo Alto Networks, ransom payments to cyber criminals almost tripled between 2019 and 2020.

Affected companies pay an average of more than $ 300,000 to get their data back or to regain control.

Strict rules of conduct for employees - even in the home office

This has consequences for day-to-day operations: The number of insurance companies to protect against cyber attacks in the USA increased by more than 60 percent between 2016 and 2019 to 3.6 million. At the same time, the insurance premiums paid have increased by 50 percent to around 3 billion dollars.

Insurance coverage is usually linked to strict rules of conduct for employees: regular mandatory security updates, no use of third-party software or USB sticks, no mixing of company and private data, precise procedural requirements for e-mail traffic or for data exchange during decentralized operations Meetings. Cybersecurity training is now just as much a part of everyday life for most company employees as training on workplace safety. The workplace in the home office must also meet security standards.

According to a study by the security company Check Point, ransomeware attacks have increased by an average of 50 percent worldwide - compared to the first half of 2020. Attacks against the healthcare system have almost doubled - in the USA they are now number 1 of the most frequently attacked areas. The number of cyber attacks including ransom demands more than doubled in autumn 2020.

In a study by the Bitkom Research institute, 652 people responsible for digital technologies were asked about their assessment of Bitcoin.

Every second company stated that Bitcoin primarily offers advantages for speculators (54 percent), followed by advantages for criminals (46 percent) who do money laundering or terrorist financing.

There is still a long way to go before Bitcoin is generally accepted as a means of payment and a parallel currency.

And the likelihood that countries like China or the USA will intervene in the crypto market to regulate it has increased significantly.

Banking supervision sees Bitcoin in the highest risk class

The Bank for International Settlements has now divided the cryptocurrency market into different risk classes. A first class of "tokenised assets" is to include cryptocurrencies that meet certain requirements and are therefore treated in a similar way to existing forms of investment. A second class, to which the Bank for International Settlements (BIS) also includes the currently most important digital currency Bitcoin, does not meet the requirements and should therefore be treated more strictly than traditional investments. One consequence would be that banks would have to hold much higher risk capital for second-class currencies such as Bitcoin. Those affected can comment on the proposals until September.

The strong growth of crypto assets and related services has the potential to trigger problems in financial stability and increase the risks for banks, said the Basel Committee.

The capital held by the banks should be sufficient to absorb a full write-off of the crypto assets without exposing the holders of bank deposits and other senior creditors to a loss.

la / mmo