HSB, part of reinsurance giant Munich Re, has underlined the risks of cryptocurrency after a survey found at least one-third of US small and medium-sized businesses accept it as a payment method.
The survey, conducted in conjunction with Zogby Analytics, found that 36% of SMEs accepted cryptocurrency, while 59% of those companies purchased digital currency for their own use as well.
Timothy Zeilman, vice president for HSB, noted that while the benefits of cryptocurrency can include lower processing fees and faster payments, the risks may increase for cyber fraud and computer attacks.
“Cyber criminals follow the money and fraud can be a serious problem,” he said. “A number of currency exchanges have been hacked or embezzled and millions of dollars were lost. Smaller businesses, especially those starting out, can’t afford to be cheated.”
Cyber thieves target small businesses with schemes including sophisticated computer attacks to malware infections spread through phishing emails.
Smaller businesses also may be targeted by hackers looking to divert computing power to record and verify cryptocurrency transactions.
HSB notes that since digital currency exchanges bypass the banking system, trade globally and operate with little regulation and a small business owner may have nowhere to turn when fraud losses occur.
“Small business owners should learn all they can about the technology before accepting cryptocurrency,” said Zeilman. “And make sure they have strong data security and insurance to protect against cyber fraud and financial loss.”