Fraud was involved in approximately 40 percent of all cryptocurrency-related complaints according to a Consumer Financial Protection Bureau (CFPB) analysis published this past fall. And in an unfortunate trend, fraud represented more than 60 percent of CFPB-reported crypto complaints in September 2022 alone, the last month on record. Given this escalation, crypto investors must educate themselves on how to ward against security risks or threats before money is lost. You’re likely doing some digging and research before deciding to work with any given crypto asset platform, but do you have any information regarding how they identify and stop fraud? If not, you should. A good way to assess a platform’s commitment to dealing effectively with fraud is to assess if they have implemented modern current forms of authentication like biometrics into their offering. New biometrics industry developments, like biometrics-as-a-service (BaaS) or cloud-based biometrics, are enabling even smaller fintechs to offer highly effective, convenient, and reliable biometric authentication capabilities without the heavy up-front work. In short, there’s no excuse for security to be lax in today’s world. Even if the platform you’re evaluating uses biometric authentication, that alone is not enough to tick the box of “adequate security.” Forward-looking fintechs are making efforts to decentralize the data, avoiding the risks of having biometric information sitting in a central database. This ensures that even if a data breach were to occur, the risk of your biometric data falling into ill-intentioned hands is essentially slim to none.
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