A Bulgarian national’s $1,500 loss in cryptocurrency highlights the need for greater clarity and regulation in the industry.
The world of cryptocurrency has been touted as a revolutionary and democratizing force, offering individuals the ability to store and transfer value in a decentralized and secure manner. However, recent experiences like that of Tzoni Raykov, a Bulgarian national who lost $1,500 worth of cryptocurrency due to an administrative error with Revolut, highlight the need for greater clarity and regulation in this industry.
The Importance of Clear Instructions
Tzoni’s experience began when he attempted to transfer some of his USDC coins to his Revolut account. He followed the instructions provided by the company, which suggested using a specific network called Polygon. However, he mistakenly selected a different network, ‘Polygon (bridged)‘, which led to the conversion of his coins into USDC.e, a cryptocurrency that Revolut does not support.
Tzonitza Raykova, also known as Tzoni Raykov, is a Bulgarian mathematician and computer scientist.
She is best known for her work in cryptography and coding theory.
Raykova has published numerous papers on secure multi-party computation and homomorphic encryption.
Her research focuses on developing cryptographic protocols that ensure the security of sensitive information in distributed systems.
The issue was compounded when Tzoni contacted the Revolut support team, who initially told him that the problem lay with the specific type of Polygon network used. However, the company’s subsequent explanation suggested that the deposit failure was due to the fact that the USDC.e coins received were not supported by their technology.
A Lack of Industry Standards
Tzoni’s experience is not an isolated incident. The cryptocurrency industry has been plagued by scandals and failures, including the collapse of FTX, one of the largest cryptocurrency firms in the world, which resulted in billions of dollars in losses for customers. Bybit, another major exchange, was tricked out of $1.5 billion worth of coins by hackers thought to be working for North Korea.
FTX is a cryptocurrency derivatives exchange founded in 2019 by Sam Bankman-Fried.
The platform offers trading services for various cryptocurrencies, including spot and derivatives markets.
FTX has gained popularity due to its innovative products, such as perpetual contracts and options.
As of 2022, the exchange had over 1 million registered users and a daily trading volume of over $10 billion.
However, in November 2022, FTX faced a liquidity crisis, leading to 'a significant decline in value.'
These incidents highlight the need for greater regulation and industry standards in the cryptocurrency sector. While some argue that the industry is too complex and should be left to self-regulate, others believe that a more stringent regulatory framework would help prevent such failures and protect consumers.
The Role of Regulation
Prof Mark Button, a researcher who studies cybercrime, notes that one of the problems with cryptocurrency firms is their tendency to grow rapidly, which can lead to difficulties in keeping up with accounting and security challenges. He argues that if we are going to be serious about cryptocurrencies in the future, there needs to be some kind of regulation.
Cybercrime refers to criminal activities committed through digital means, such as hacking, identity theft, and online fraud.
According to the FBI's Internet Crime Complaint Center (IC3), cybercrime costs the global economy over $6 trillion annually.
The most common types of cybercrime include phishing, 'ransomware attacks' , and business email compromise (BEC).
To combat cybercrime, individuals and organizations must implement robust cybersecurity measures, including password management, firewalls, and regular software updates.
In Tzoni’s case, having clear instructions and a more robust regulatory framework might have prevented him from making such a transaction in the first place. Additionally, laws stating what firms need to do if they receive a coin they don’t handle could have helped mitigate the damage.
A Call for Caution
While cryptocurrency has the potential to be a game-changer, it is essential that consumers approach this space with caution and do their own research. As Mykhailo Tiutin, chief technology officer at AMLBot, notes, ‘You have to do your own research.‘ The successes and losses in the cryptocurrency industry are ultimately at your own risk.
In conclusion, Tzoni’s experience serves as a reminder of the importance of clear instructions, regulation, and caution when dealing with cryptocurrency transactions. As the industry continues to evolve, it is crucial that we prioritize consumer protection and ensure that firms like Revolut handle customer assets responsibly.
