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Fraud in the age of cryptocurrencies: protecting your digital assets | UCL News
English undergraduate student XueFei Liu shares what she learned about the intricacies of cryptocurrency and ways to protect your finances during National Student Money Week.
“Don’t hang up the phone, I need you to transfer the money now.” » Hearing these words, as a first-year international student living in London for barely a month, I panicked. Luckily, I quickly ended the call, but I know several international students like me who weren’t so lucky.
An event held during National Student Money Week this year, “Cryptocurrency: Protecting Your Digital Wallet,” raised our awareness of the risks of investing in cryptocurrency and protecting our digital wallet.
A new approach to financing
Phillipp Jovanovic, Associate Professor of Information Security at UCL, opened the event by informing us about the history of money and how society moved from analogue to digital currency in over the last three decades. The evolution of cryptocurrencies has paved the way for programmable money, offering a new approach to financial transactions not governed by traditional institutions. Bitcoin, a prominent example of a cryptocurrency, operates on a decentralized network, where users can transfer funds through a public ledger known as a blockchain.
Questions around cryptography
This new generation of cryptocurrency has made strides to improve the efficiency and privacy of digital transactions. However, Phillipp points out that as crypto continues to reshape the financial landscape, questions arise regarding legal and ethical implications, surveillance and privacy. How do we protect our privacy? Who benefits in this situation? More importantly, what happens when technology breaks? “We cannot deny,” he says, “that cryptocurrency opens up new possibilities for how we interact and transact within society, but one should nevertheless be careful with cryptocurrency because it opened a new field of scams.”
Steven Ngo, President of the UCL Blockchain Society, shared his views on the growing importance of blockchain technology and digital currencies in the future. He discussed the company’s educational initiatives, which aim to introduce students to the world of blockchain through lectures, workshops and hackathons. Steven doesn’t tend to use cryptocurrency much in his own life. It recognizes that there is a risk in using cryptocurrencies, where you could lose your key and, therefore, all your money. He claims that in the future, cryptography will be used much more widely as more businesses turn to the use of blockchains, opening up a branch of new careers.
The risks are real
As Steven and Phillip mentioned, cryptocurrency opens a new window into uncertainty and, unfortunately, scams. Crime Officers DS Rebecca Corser and PC Tom Conley from the Metropolitan Cyber Prevention Team highlighted the different types of online fraud and scams (i.e. investment fraud, sextortion, cyber kidnapping) which target individuals who store their assets in cryptocurrencies. People aged 18 to 24 lose the most money, and from April to June 2023, Brits lost £600 million, while 86% of fraud still goes unreported.
How to protect yourself
As everything positive for us in cryptocurrency is also beneficial for criminals, Tom shared the golden rules for preventing crypto-crime:
- Don’t be in a hurry. Criminals want to trigger an emotional response from you because it would make you think irrationally.
- If it sounds too good to be true, it probably is. Don’t follow investment advice from influencers like Kim Kardashian. ALWAYS do your OWN research.
- Be wary of unsolicited contacts that pressure you to take action or divulge information.
- NEVER click on anything you are unsure of and look for subtle differences in URLs.
- Don’t advertise your assets in the same way you wouldn’t advertise your wealth. This can make you a target for criminals.
- Passwords: length and complexity are important. Don’t use passwords specific to yourself (please don’t use something like UCL123) and always keep your recovery seeds secure, preferably separate and not on your phone.
Learn more
As the world moves toward a more digital and interconnected financial system, we need to educate ourselves about the risks and best practices for securing digital assets.
Check Small media series created by the Metropolitan Police to provide advice on common types of fraud and prevention advice.
If you are a victim of fraud, don’t be shy and report it directly to the police and Fraud Action (0300 123 2040).
If you have any concerns related to crime, please do not hesitate to contact UCL Crime Prevention and Personal Safety Advisor Sophie Bimson to ensure you have appropriate support. Don’t forget that UCL is here to help you!