Facebook is no stranger to data hacks and leaks, with the company having been on the receiving end of many high-profile security breaches in recent years. For example, back in 2018, the social media giant revealed that it had inadvertently exposed the personal information of more than 50 million users due to a small error in its platform coding, thus allowing miscreants to gain access to its users’ accounts.
Similarly, in 2020, the Mark Zuckerberg-led firm was embroiled in another major controversy when it came to light that thousands of developers had been able to access data from inactive platform users, again drawing the ire of many folks across the globe.
Now in 2021, the tech juggernaut has once again been hit with a fresh wave of data leaks, however, this time around, the number of users whose records were exposed was not 50 million but a staggering 500 million. On April 3, Alon Gal, chief technical officer of security firm Hudson Rock, revealed that sensitive personal information for over half a billion Facebook users was shared on a well-trafficked hacking forum.
To be more specific, the records include phone numbers, full names, locations, birthdates, bios, and, in some cases, email addresses of over 553 million located users across a total of 100 countries. Not only that, of the above-stated figure, 32 million users are apparently from the United States, while 11 million are from the United Kingdom.
Lastly, this data which is now doing the rounds online has potentially put at risk the savings of millions of digital currency traders and hodlers who now may be vulnerable to SIM swapping and other identity-based attacks, which have happened in recent years.
What should be done?
How exactly does this most recent breach place at risk the crypto assets of individuals? Dave Jevans, CEO of blockchain security firm CipherTrace, told Cointelegraph that people who have had their phone numbers leaked need to be extra cautious since a lot of fraud involving digital assets hinges on such info, adding:
“We’ve seen an increase in SIM swaps, phishing attacks and other types of fraud involving cryptocurrencies that rely on acquiring the phone numbers of victims to execute. Leaked info about the identity of high-profile crypto users gave bad actors the ability to target them.”
He went on to add that individuals who believe their crypto may be at some sort of risk need to reconsider their existing privacy strategies — basically, thinking twice before storing all their holdings in a centralized exchange that may leverage user phone numbers for two-factor authentication.
Jevans further opined that managing one’s own keys could be a better way to protect our valuables from being phished via the use of stolen phone numbers. However, he conceded that even that may not be enough. “Phishing attackers can still use other means of acquiring account and address information, but it’s much harder,” he added.
Providing a take on the matter, Ben Diggles, co-founder and chief revenue officer for Constellation — a scalable enterprise-grade blockchain creating a standard for securing data in transit — told Cointelegraph that Facebook’s latest security lapse is not surprising, especially since most users of the social media platform tend to adhere to a different mindset — i.e., they like their world to be managed and organized for them.
He added that for most users, if they forget their passwords, they can just have the system reset it for them. Not only that, in Diggles’ view, most folks using Facebook aren’t even totally aware of how big their digital footprint actually is — a facet that Facebook doesn’t make too obvious either — adding:
“Those that are crypto holders that were on the list have little to worry about unless they were storing descriptive details of their holdings and access on their Facebook account. However, these hackers have gotten really sophisticated, so I have no idea what tricks they may have [up] their sleeves with regards to scraping info specific to crypto wallets and exchanges.”
That said, as a precautionary measure, he believes that it would be best if most users change their passwords across all of their social media accounts as well as other platforms that share their data with Facebook.
Does decentralization matter?
As more data leaks continue to happen, an increasing amount of people around the world are beginning to realize the value proposition that decentralized systems put forth from a security standpoint, especially since they do not feature a single point of failure.
On the subject, Eli Arkush, a cloud solutions engineer at cybersecurity firm GlobalDots, opined that having the backend system of a platform distributed using blockchain technology might make it a bit harder on the hackers to get a hold of user info; however, once credentials fall into the wrong hands, password reuse can become an issue.
Similarly, Diggles believes that few people are educated enough to understand why decentralization actually counts, since, in theory, everything already seems fairly decentralized in their experience, at least from a digital standpoint.
He added that most people don’t know that the internet plays by its own rules and thus when he tells people about how technologies such as Brave and the Basic Attention Token work, it’s mind-blowing to them: “Most people aren’t aware of their involvement in the grander data world, and I can see why humans have been conditioned to think centralization is safer.” He added: “If users are made aware that value is being siphoned off of them every day, I think they would change behaviors quickly.”
However, Stephen Wilson, a member of the Australian government’s National Blockchain Roadmap Cybersecurity Working Group and CEO of security services provider Lockstep Group, is of the opinion that contrary to what some may believe, it’s never a good idea to save personal information on any sort of blockchain ecosystem.
He pointed out that the type of personal information breached by Facebook should never be stored in a blockchain, and even if one does, such data can never totally be protected by blockchain with any sort of long-term effectiveness. He stated further that “there are many different facets of decentralization and distributed systems,” adding:
“Blockchain and DLTs usually only decentralize some aspects of data management. They don’t usually decentralize data storage in any relevant sense because they tend to duplicate ledger entries across multiple systems. The storage is distributed, but identical copies of information are available in multiple locations and can be vulnerable to attackers or thieves.”
Crypto hacks in 2020 were centered around the DeFi space
Late last year, crypto hardware wallet manufacturer Ledger was on the receiving end of a data hack, as a result of which the private information of more than 270,000 users was leaked online. Following the incident, users started reporting extortion threats from bad actors resulting in many users even considered initiating legal action against the firm.
Furthermore, a total of 28 attacks were witnessed in relation to various prominent cryptocurrency exchanges and trading platforms in 2020, with the total sum of money being compromised as a result of these ploys amounting to around $300 million.
According to a report released by CipherTrace, more than 50% of all nefarious activities in relation to the crypto market last year were linked to various decentralized finance protocols after the immense amount of growth over the past year.
In the past, most hacking schemes have, by and large, focused on stealing funds from cryptocurrency exchanges, for example, in 2014 and 2018, the amount of money compromised as a result of exchanges being hacked lay at $483 million and $875 million, respectively.
However, an increasing number of miscreants are now turning their attention to stealing user data because it provides them with unique avenues to acquire funds with relative ease. Thus, it is of utmost importance that crypto owners learn how to protect their assets, using advanced tools not to fall prey to such breach attempts.
Pele NFTs to Drop on Ethernity Chain from May 2
NFTs is about capturing value of precious moments compliantly. Ethernity Chain does this brilliantly, this time by dropping a new collection of NFTs honoring the legacy of the iconic Brazilian soccer player, a world cup winner, and a legend in soccer halls, Pele.
Pele is coming to Ethernity Chain
An announcement from Ethernity Chain—a differentiated platform introducing authenticated NFTs, on Apr 16, said Pele’s collections would be available in two weeks from May 2.
These valuable collections are created by Kingsletter and Visual Lab–leading Australian Concept artists. It is the first time the legend’s trading cards have been released digitally.
The second batch will be Pele NFTs will be released later this year.
It is easy to see why the physical vintage cards of Pele are worth millions and considered the most valuable in the world.
Pele’s Golden Records make his NFTs Valuable
Pele is award-winning and honored severally in the last 60 years or so.
Together with Diego Maradona, they are joint winners of the FIFA’s Player of the Century award.
He was also instrumental in three World Cup-winning teams of 1958, 1962, and 1970.
Besides, he was unplayable during his playing years. Thus far, he remains the highest goal scorer in Brazilian national team history, scoring 77 goals in just 92 appearances.
Before retiring in 1977, Pele scored 500 goals for Santos—a professional football club in Brazil.
For this, Pele is adored and endeared by football fans and bodies globally for his contribution to Soccer and tireless efforts in eradicating poverty. Through the Pele Foundation, the mega football star is empowering Children battling poverty.
For this reason, 90 percent of Ethernity Chain’s sales will directly benefit the charity.
Jason Heuser’s NFT Collections Sold out for Big Dollars
This collection will be the second following Ethernity Chain’s partnership with Jason Heuser, which saw the drop of the “Welcome to the Internet” collection.
It was an immense success since the “Legendary Edition NFT” eventually sold for $162k from 22 bids. The NFT hard a reserve price of $35k.
Other NFTs—the “Limited Super Edition” sold for $173,824 while the “2012 Original” was scooped for a whopping $224,800.
Mergers and acquisitions are rising, leaving crypto assessments in question
Fintech, cryptocurrency and mergers and acquisitions are poised to intersect significantly in the coming year. M&A activity is expected to rebound quickly — more than 60% of decision-makers at large companies who were surveyed by FTI Consulting for a February report agree that their company has recently been a target of aggressive M&A, and 39% say their companies are looking at M&A as a result of the COVID-19 pandemic. At the same time, the cryptocurrency market is making strides toward mainstream acceptance.
As a result, there’s likely to be an uplift in deals involving cryptocurrency assets and valuations throughout 2021. While this trend is likely to spur some exciting developments in the financial sector, it is also starting to raise unprecedented questions about whether cryptocurrency and these complex business models can be accurately assessed and verified in the context of dealmaking.
Digitizing the world of finances
The effects of the COVID-19 pandemic have driven significant shifts from physical to digital services across a wide range of industries — none more dramatically than in the financial services industry, in which S&P Global has reported that an estimated 420 billion transactions, worth $7 trillion, will switch to cards and digital payments by 2023, reaching $48 trillion by 2030.
PayPal further legitimized cryptocurrency when it began accepting it in November 2020 and announced its acquisition of Israeli crypto startup Curv in March. Visa has also been active in the fintech arena, most recently with its $5.3 billion acquisition of Plaid in January. Investors are also keeping a close eye on the developments that will follow Coinbase’s recent debut on the Nasdaq stock exchange. Naturally, all of this activity is generating a lot of interest in fintech and cryptocurrency companies among traditional financial services institutions and big tech corporations. Even amid market lows during the first half of 2020, cryptocurrency-related M&A hit $600 million, more than the total for all of 2019. All signs point to an even larger year in 2021.
The need for due diligence
Of course with M&A, IPOs and capital raises also comes the need to conduct due diligence, market assessments and valuations. But when cryptocurrency is involved as the primary asset or a key asset, there are additional, complex layers to standard due diligence processes.
Buyers and target companies need to consider conducting a technical assessment of the digital assets at play. Potential buyers will want to know how to verify the cryptocurrency assets and ensure that the target company’s reported assets are accurate. Because cryptocurrency companies often operate under unconventional business models, and due to the very nature of distributed ledger systems, it’s not always clear what’s what. The crux of the issue is to find out about any problems, risks or inaccuracies in a target company’s cryptocurrency assets, framework and business model and whether they have the correct procedures in place to support their crypto-based business activities.
Likewise, cryptocurrency companies that are looking to raise money or sell their business to a larger technology or financial services corporation (or file for an IPO) can help position their business by conducting in-depth assessments that will demonstrate their differentiators and value to potential buyers, and support subsequent valuation and due diligence activities.
The nuances of the crypto space
Many may not understand the importance of conducting a technical assessment and cryptocurrency evaluation as part of their larger financial due diligence, or that it’s even possible. However, experts in this space are beginning to develop complex methodologies to conduct, fast, in-depth and cost-effective technical assessments of cryptocurrency assets and leverage digital forensic investigation techniques to sample and verify digital wallet ownership, digital asset ownership, as well as verify assets under custody, and the value and validity of assets.
Additional areas that buyers should examine in a crypto-focused technical assessment include:
- The full scope of digital asset holdings, including hot wallet services, cold wallet storage, business wallet services, portfolio management and other services.
- Size, locations, duties and other key details relating to technical and sales support, and development teams.
- Risks within cryptocurrency-related contracts, privacy, security, Know Your Customer, Anti-Money Laundering, signatures and other policy controls.
- Code audits across wallets, user interface and application programming interfaces.
- Governance implications (such as regulatory requirements and standards including the United States government’s Cybersecurity Maturity Model Certification and the European Union’s General Data Protection Regulation).
- Technical structure and stability.
- Third-party partnerships, data use and obligations.
- Research and development projects and developmental coin/token support.
In addition to traditional financial due diligence and valuations that accompany fundraising and M&A transactions, buyers in this space will also need to validate and assess the technical elements of the target company’s cryptocurrency assets and structures. Doing this right will require the support of a domain expert in blockchain and cryptocurrency who understands the technical complexities and knows what questions to ask. Cryptocurrency remains an enigma to many people, but a thorough, expert-driven technical audit can reveal risks and eliminate guesswork to support the execution of high-value, disruptive deals.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Steven S. McNew is a senior managing director within the technology practice of FTI Consulting. In his role, Steven helps clients evaluate and implement blockchain solutions and builds cost-effective, defensible strategies to manage data for complex legal and regulatory matters. Steven is an expert in blockchain, information and data security, complex discovery and digital forensics. He completed studies in blockchain and cryptocurrency at MIT and has led engagements involving blockchain assessments, pilot projects and software selection and implementation. He has also led disputes involving issues related to blockchain and various forms of cryptocurrency.
AgeUSD to Launch as First Stablecoin on Cardano Network
Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. The firm has since announced a partnership between the Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.
The AgeUSD stablecoin will be available on Cardano as soon as smart contract capabilities are launched on the blockchain, it revealed.
Do We Need Another Stablecoin?
Emurgo is aiming to prevent events like MakerDAO’s Black Thursday which emerged through vulnerabilities in its Dai collateralization mechanism. A mass liquidation of the vast majority of Maker vaults resulted in around $4 million in Dai being under-collateralized at the time in March 2020.
AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).
“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly,”
The stablecoin runs on the Ergo blockchain aiming to automate as much as possible within the mathematics of the protocol itself. Reserve providers pay Ergo’s native currency (ERG) to mint reserve coins which represent the underlying collateral. Users of the stablecoin can also deposit ERG into the reserves in order to mint AgeUSD, it explained. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to loan out funds.
The Cardano partnership will also enable its native token, ADA, to be used as collateral to mint reserves. However, the potential downside is that the stablecoin is only backed by these two assets whereas Dai is backed by multiple cryptocurrencies.
AgeUSD will launch on Cardano when it rolls out the Alonzo update that ushers in Plutus powered smart contracts. This is expected in the latter half of this year according to the roadmap.
Cardano ADA Price Update
As the long-awaited update nears, ADA prices have been cranking to new highs, the most recent ATH being $1.55 on April 14. At the time of writing, ADA was trading up 2% on the day at $1.45 according to Coingecko.
It is the sixth largest cryptocurrency by market cap which currently stands at $46 billion and there are 32 billion tokens in circulation. The token was briefly flipped by Dogecoin but has regained its position in the charts, just below Tether.
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