Cryptocurrency has been touted as the future of the economy, but it might be just as vulnerable to hackers as the cash in your wallet is to pickpockets.
Although there’s no official figure available for how many Australians have invested in cryptocurrency, Canstar data shows it was one of the top three investment options for first-time investors in 2021.
But investing in cryptocurrency is like buying a very expensive lottery ticket; there’s no guarantee of a huge payoff.
In fact, there is a constant risk of losing your entire investment.
According to national competition regulator the ACCC, more than $35 million was lost in Australia to cryptocurrency scams by mid-2021.
And once that money is gone, it stays gone, University of Melbourne cyber security lecturer Shaanan Cohney said.
“There is no remedy,” Dr Cohney said.
“In rare circumstances, if you are a corporate holder of cryptocurrency, there are various forms of insurance available. But those tend to be highly limited.
“For your average Australian consumer, once you lose it, it’s gone.”
Why is cryptocurrency vulnerable?
Everyone wants to get in early and make a buck in the online economy, but that is leaving room for error, University of New South Wales senior lecturer Eric Lim said.
Dr Lim compared the current cryptocurrency and blockchain culture to that of Silicon Valley, the American home to technological movers and shakers such as Apple, Google, and Facebook.
He said the Mark Zuckerberg-esque “move fast and break things” culture in the cryptocurrency space could be leading to design and security flaws as developers rush their products to the finish line.
Although developers might not have malicious intent, Dr Lim said the ultimate byproduct of lack of due diligence is that people get hurt and lose their money.
But the responsibility also goes both ways between the developer and the community using the product, he said.
“[A decentralised] ecosystem is owned by the community, and the community actually sets the standard in terms of the level of rigour that is required from such services,” he said.
“So, at this stage, if the community of such ecosystems does not actually demand a high level of rigour and a high level of scrutiny on such products and services that are being pushed into the market, then of course, it increases the probability of such hacks happening.”
Most common type of attacks
Dr Cohney said by far the most common type of hacking attempt is done through phishing attacks.
This is where someone will send you a message, likely through email, pretending to be someone you are familiar with to gain your trust, such as your boss or a company you know, and ask for your details.
If you give your details, either through email or on a website that the message has directed you to, “your funds will be removed very quickly”, Dr Cohney said.
He said malware, a common term for computer viruses, will look through your device to find your cryptocurrency wallet details, and will attempt to drain any wallets that you have of their contents.
“Also, there are just a very large number of scams out there,” he said.
“If something sounds too good to be true, it probably is.”
But not all is lost – there are some steps you can take to save yourself some financial pain.
How to protect your crypto
Sometimes there’s no better protection for modern technology than going old school and keeping things off of the cloud.
If you have cryptocurrency, then you’ll need a private key (typically a string of letters and numbers) to remove funds, and Dr Cohney said you should invest in a hardware wallet to keep it safe.
A hardware wallet is a physical storage device, similar to a USB or hard drive, that acts as a cryptocurrency wallet to store your private keys.
Dr Cohney said if you have given control of your private keys to a third party through a custodial wallet, such as Coinbase, make sure you have enabled basic security measures such as two-factor authentication and a strong password.
If you need to access your cryptocurrency or your custodial wallet, go directly to the official website rather than clicking on links and emails to get there, he said.
To decrease your chances of becoming a victim to hacking, Dr Lim said there is no better thing to do as a user than educate yourself.
He said the onus is on users to ask questions, just as it is for customers when buying a product such as a laptop.
“[If] I want to buy a laptop, it’s up to me to do the due diligence of researching which one is the best laptop out there,” Dr Lim said.
“If you are trying to use these decentralised apps or decentralised financial products, then it’s up to you to actually do all this due diligence yourself.
“Look at the the teams behind these projects, do they have the necessary credentials? Or do they have track records of pushing out good products and services? And what are the methods that these developers use?”
Dr Cohney said if you don’t understand something, don’t use it.
US equity markets fell on inflation concerns ahead of next week’s highly anticipated Federal Reserve meeting, overshadowing a reasonably strong start to the Q4 2021 earnings season.
Following the weaker lead from Wall Street, the ASX200 fell to 7300, providing another test of the market’s resolve to keep the local bourse rotating around the 7400 region it has spent the past three months.
Here are the top five things that happened in markets this week.
1. US Q4 2021 earnings results
Despite some notable earnings misses from usually dependable names, including Goldman Sachs, JP Morgan, and Citigroup, according to FactSet, of the S&P 500 companies that have reported to date, nearly 70 per cent have topped Wall Street’s expectations.
2. Australian jobs data for December
Following an impressive gain of 366k jobs in November, the Australian economy added another +64.8k jobs in December.
The seasonally adjusted unemployment rate fell to 4.2 per cent from 4.6 per cent, its lowest level since pre the Global Financial Crisis in August 2008.
3. UK inflation data
The inflation rate in the UK increased to 5.4 per cent in December, above market forecasts of 5.2 per cent.
It is the highest reading since March 1992, and the inflationary peak is yet to be reached, as utility prices will be hiked in April.
The Bank of England with likely deliver a 25bp interest rate hike at its meeting in the first week of February and commence Quantitative Tightening (QT) in March.
4. Bulls take the upper hand in ‘The Battle for Bullion’
Gold shrugged off rising yields to surge above $1840 on fears that rising inflation will debase fiat currency, restoring gold’s status as an inflation hedge.
Should gold now see a sustained break and close above downtrend resistance at $1850, from the 2020, $2075 high, it would indicate the rally in gold can continue towards the $1950 area.
5. Iron ore recovery set to continue
Chinese-affiliated state media noted that China has opened its monetary policy toolbox and won’t allow growth to drop below 5 per cent.
When Chinese authorities set targets, they rarely miss them.
Continued monetary policy easing from Chinese authorities will provide the foundation for the next leg higher in iron ore towards $160 p/t – 20 per cent higher than its current price.
Brought to you by City Index. Access to over 4500 global markets on shares CFDs, Indices, Forex & Crypto with a trusted provider.
All trading carries risk. The figures stated are as of January 20, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.
Eight butter products sold through major supermarkets across Australia have been urgently recalled amid fears of contamination.
Food Standards Australia announced that Devondale and Woolworths butter and butter blend products had been pulled from shelves.
Producer Saputo Dairy Australia said there were concerns about potential microbial contamination – contamination with pathogenic microorganisms such as bacteria, viruses or parasites – in the popular spreads.
The dairy spreads are sold nationwide at a host of outlets, including Woolworths, Coles, Aldi, Costco and independent supermarkets.
The affected products are:
- Devondale Salted Butter, 250 grams, with best-before dates of May 18 and June 4
- Devondale Salted Butter, 500 grams, with best-before dates of April 30, May 1 and June 24
- Devondale Salted Butter, 3 x 500-gram pack, with a best-before date of May 1
- Devondale Unsalted Butter, 500 grams, with a best-before date of April 30
- Devondale Dairy Soft Original, 500 grams, with best before dates of January 6, April 6, and May 11, 12 and 26
- Devondale Dairy Soft Salt Reduced, 500 grams, with a best-before date of May 10
- Woolworths Butter Salted, 250 grams, with best-before dates of April 21, May 12 and 13, and October 16
- Woolworths Butter Unsalted, 250 grams, with best-before dates of May 11 and 12, and October 16
Food Standards Australia and New Zealand said the products may cause illness if consumed.
“Any consumers concerned about their health should seek medical advice,” it said.
Anyone who has bought any of the affected products is urged to return it to where they bought it for a full refund.
See more information from FSANZ here.
Health Minister Greg Hunt has accused businesses of lying about desperately needed supplies of rapid COVID tests being seized by the federal government.
There have been multiple claims from Australian businesses that they have been told by wholesalers that orders of rapid tests for workplaces have been diverted to fulfil government orders.
On Wednesday, the South Australian government also said it had asked regulators to investigate reports of its RATs had been improperly diverted to other states.
But in Canberra on Thursday Mr Hunt emphatically denied suppliers’ claims that orders of the scarce tests were being requisitioned by the government.
“They are lying. That is why I am reporting them to the ACCC,” he said.
“There are people in the market that will make statements and promises and not be able to deliver. What we are seeing is that, whether it is Commonwealth, state or territories, or community or private sector, that some suppliers have overcommitted and not been able to deliver.”
There have been multiple reports in recent weeks, as Australia’s Omicron outbreak has spiralled and the PCR testing system began to buckle, that business orders of the crucial saliva tests were failing to arrive – despite being paid for in full.
Last week, Queensland Rail said it had been told an order of 20,000 tests would not be fulfilled, while a Victorian business said it had been told its bulk order for its staff had been seized.
Retailers such as Werko, Star Hygiene and HiCraft have also blamed federal government requisition of RATs on arrival in Australia for delays in filling orders, according to a report in the Financial Review on Wednesday.
SA Premier Steven Marshall also said he had written to Australian Competition and Consumer Commission boss Rod Sims asking him to investigate reports some tests bound for his state had been improperly diverted.
He said the NSW and Victorian governments had denied requisitioning tests at Sydney and Melbourne airports.
“If these allegations prove correct, it’s quite possible that they are illegal, anti-competitive and, of course, they’re a massive kick in the guts for South Australia,” Mr Marshall said.
But Mr Hunt said there was a global shortage of the crucial tests, and some suppliers were making wild claims.
He said the Commonwealth had supplied 6.1 million tests to aged care, and was beginning supply them to states and territories to hand out.
“We are seeing more supplies coming in through the system, where we use defence transport and logistics support to work with the private sector and the states,” he said.
“We are expecting to see 60 million movements in Australia over the coming weeks for the Commonwealth, state and community purposes.”
Earlier this week, Pharmacy Guild national president Professor Trent Twomey said his members were struggling to secure stock, and many had had orders delayed.
But, he told Guardian Australia, that reports from members that stock was being requisitioned by governments could not be substantiated.
Instead, he said, requests for big orders, worth millions, from governments – both state and federal – were hard for suppliers to ignore.
Victoria announced on Thursday it had ordered a further 166 million rapid tests, on top of a bulk order for 44 million tests earlier this month.
NSW this week increased its order of rapid tests to 150 million as it planned for surveillance testing of 1.3 million school students with the beginning of the school year.