Security Aspects and Challenges

While cryptocurrencies offer new ways to handle money, they also bring a lot of security concerns for both users and the company/organization. Criminals have a new “legal” way to protect themselves from exposure because the pseudonymous nature of cryptocurrencies brings the privacy. Mehta and Chawla (2024) categorize these risks into “barriers” to legitimate use (such as technical complexity and lack of trust) and “illegal usage”. Their research confirms that criminals are using it for illegal activities like money laundering, and it is hard for authorities to follow the money compared to the traditional bank transfer. For normal users, keeping cryptocurrencies is something that we would think it is an easy task. However, this is also a favorite place for hackers to steal the funds. If you are not lucky and get your funds stolen, it is impossible to get them back because of the nature of the cryptocurrency’s technologies.
The anonymity of cryptocurrencies technologies has increased manipulative scams. An example is the “pig butchering” fraud, an incident that happens when criminals use social engineering to build long-term trust with the victim before convincing them to invest large sums of money into a fraudulent cryptocurrency platform (Burrell, 2025). In this attack, cryptocurrency is the primary tool for the final “butchering”, because of the pseudonymous nature of the transactions makes the stolen funds nearly impossible to recover. This example shows how cybercriminals use both human psychology and technology to cause the financial and mental harm. The “pig butchering scam”, which saw its revenue grow by nearly 40% year-over-year in 2024 (Chainalysis, 2025, p.58)
These scams also show a sophistication that emerging “scam as a service” ecosystem. Platforms like Huione Guarantee, a marketplace that tied to a Cambodian conglomerate, provide criminals with the tools they need to plan and execute these frauds at scale. These activities include selling targeted data lists, web hosting services, and even using Generative Artificial Intelligence software that could create a fake personas and realistic content to trick victims into making fraudulent investments (Chainalysis, 2025, p. 63-64). This type of fraud demonstrates a convergence of psychological manipulation and advanced technology, and it involves with cryptocurrency serving as the final, irreversible method of extraction.
The dangers of cryptocurrency are no longer limited to the digital side. The Chainalysis (2025) report a rise in cases where criminals use violence to force crypto transfer. These attacks fall into two categories: opportunistic street crimes, where a stolen phone reveals a crypto wallet, and targeted attacks on high-net-worth individuals. In one notable incident, seven members of a UK gang were sentenced for kidnapping and torturing a crypto investor over several months to extort his funds. In another incident, the co-founder of the hardware wallet brand Ledger was kidnapped from his home and held for ransom (Chainalysis, 2025, p.133). These incidents show that the perceived wealth stored in crypto wallets is making individuals physical targets, blurring the line between cybersecurity and personal safety.
Businesses and other institutions are not exception. They are also facing a lot of attacks. In 2024 alone, $2.2 billion was stolen from crypto platforms through hacking incidents (Chainalysis, 2025, p.75). These attacks are often carried out by state-sponsored groups, such as those from North Korea, who use stolen funds to finance weapons programs. As Nkambule et al. (2025) note, organizations struggle to develop a robust cybersecurity frameworks to defend against such threats, which often exploit vulnerabilities in smart contracts or through the compromise of private keys.