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The Average Initial Coin Offering (ICO) has Security Flaws

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ICO flaws flaw

A recent audit report by Positive.com indicates that the average ICO has more than five security flaws in their system. These vulnerabilities affect the image of the company. In fact, of all the companies reviewed, only one passed in terms of security quality.

It is essential to note that Positive.com prides itself on being a security platform that protects ICOs against cyber-crime. Research shows that in modern times the chances of a company experiencing a cyber-attack is considerable.

All the flaws uncovered by the firm were classified from medium to severe. However, according to Positive.com’s slogan, ‘just one vulnerability is enough for attackers to steal investors’ money and do irreparable damage corporate reputations.

A New ICO Sphere and New Security Flaws

The significant amounts of money currently lying in ICO accounts are very attractive to cyber criminals. This leads them to target these companies. A report at the beginning of 2018 indicated that 7% of the money raised by ICOs fell into the hands of criminals. This means tha a figure of $250 to $300 million disappears at the hands of these criminals.

Positive.com’s lead cyber security officer, Leigh-Anne Galloway indicates that ‘the moment a company goes public with the intention of launching an ICO marks the beginning of cyber-crime’. It is crucial that firms presenting an ICO must consider all the prerequisite security measures and where flaws might emerge.

The most common forms of vulnerabilities occur following smart token contracts. Positive.com reports that 71% of the researched companies had flaws at the initial stage.  Nevertheless, to further understand the problem, a thorough feasibility study should be conducted.  The web application used in the launch of the ICO requires regular monitoring to ensure efficiency and quality service.

Open source software applications are particularly vulnerable to attacks. Similarly, mobile applications offer less protection unless it has security software installed.  In addition, all the mobile applications scrutinized by the firm displayed security flaws and exploitable weaknesses which exposes customer information to third parties.

Complex Passwords

One major concern for ICOs include weak security procedures involving social media and email accounts.  Therefore, when these accounts are compromised the hackers can take control and divulge sensitive information. In fact, if the hackers gain access to the company’s email accounts they can cause substantial damage to the company’s reputation.

The recent CoinDash hack occurred after the company was threatened by hackers.

The report is an eye opener for many small ICOs to improve the security of their web applications. This will eliminate any vulnerability flaws and enhance the productivity and confidence of the company.  Therefore, miss Galloway notes that all small ICOs should follow the correct security protocol from the beginning to avoid complications in future.

 

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