The United Arab Emirates (UAE) is well established as a global hub for technology and innovation, with a rapidly growing interest in blockchain and cryptocurrency technology.
However, being an ever-evolving business hub and the rising popularity of cryptocurrencies, there comes a different shift, like cyber-attacks targeting institutions, businesses, and individuals. As the UAE embraces digital currencies, it encounters a parallel rise in cyber threats propagated by malicious actors. Consequently, while reaping the benefits of decentralized and digitized transactions, the nation must remain vigilant against evolving threats from cybercriminals.
The decentralized nature of cryptocurrencies, attributed to their lack of centralized control, poses a unique challenge. Cryptocurrencies are different because they lack a central authority controlling them. If someone steals the secret code you use to access your cryptocurrency, you cannot get your money back. Unlike traditional financial systems, where recourse mechanisms are often available, the inherent design of cryptocurrencies places the onus squarely on the investor’s shoulders. The cryptographic code – the private key that provides access to one’s holding – is very important. If hackers get this key, there’s no avenue for recovery virtually. It makes investing in cryptocurrencies riskier than normal things like bonds or stocks.
Apart from theft of codes, cryptocurrencies provide anonymity that promotes a way for hackers to demand ransom payments in ransomware attacks. Now you understand the pressing need for bolstering cyber security measures in the UAE.
The Blockchain Strategy in UAE
Cryptocurrencies present a double-edged proposition in the UAE, offering advantages such as expanded financial access, heightened privacy, and decentralized transactions. Notably, the UAE government has proactively embraced the integration of cryptocurrencies and blockchain technology in different sectors like logistics, real estate, and finance, launched by His Highness Sheikh Hamdan. An example of this commitment is the Dubai Blockchain Strategy, a collaboration between the Dubai Future Foundation and the Digital Dubai Office.
The Dubai Blockchain strategy was launched to provide impactful, efficient, secure, and seamless city experiences to achieve technological leadership and digital innovation. With its aim to use the potential of blockchain technology, the strategy is set to generate substantial economic opportunities in different city sectors. The strategy perfectly aligns with Digital Dubai’s mission to establish the city as a technology hub in a smart economy, encouraging global and entrepreneurship competitiveness. The successful execution of the strategy will position the UAE among the first blockchain governments globally.
Crypto Currency- Driven Cyber Threats
Cryptocurrencies have led to the rise of ransomware attacks by allowing the transfer of illicit funds directly to crypto wallets. Apart from providing the recipient’s anonymity, such wallets make recovery efforts difficult. With cryptocurrencies, hackers can move millions of dollars in ransom across national boundaries in seconds and without a trace.
Ransomware attacks continue to be a huge threat in the UAE. According to a global study, 77 percent of organizations in the UAE, such as healthcare institutions, critical infrastructure, and even small businesses, suffered at least one ransomware attack in the past years. However, at the beginning of 2023, ransomware attacks have reduced significantly by 70%.
Additionally, cybercriminals often impersonate legitimate cryptocurrency exchanges, wallets, or initial coin offerings (ICOs) to trick users into disclosing confidential information such as login credentials and private keys. To thwart such threats, education and awareness campaigns are pivotal. The idea of quick profits from cryptocurrencies makes individuals more susceptible to scams.
A victim in Sharjah lost over 1 million dirhams to a crypto scam after a cybercriminal befriended her on WhatsApp. The hacker tricked the victim into investing $12,000 in a crypto trading platform. After making some returns, the victim forked an additional $200,000, only to discover later that she was trading in a fake crypto platform designed to mislead investors into believing they were making real reaturns.
Ways to Protect UAE’s Digital Future
The rise of cryptocurrencies and the new wave of cyber-attacks needs a multifaceted approach to cyber security. To safeguard the digital landscape, some of the strategies to employ include:
1. Training and Education
With the advent of blockchain and cryptocurrencies, everyone is on the line. Individuals have their wallets, and as mentioned earlier, due to the nature of cryptocurrencies, once your code is stolen, there’s no way to recover.
Therefore, there’s a need to raise awareness among the country as a whole and not just businesses, organizations, and government entities. The UAE has increased the ability to buy real-world assets with crypto-assets. Surprisingly, even allowed for small transactions like buying a meal. This move is huge; individuals must know what it means before taking these steps.
2. User Empowerment
There is a need to train on common cyber threats, best practices, and how to identify potential scams to ensure attacks are prevented. Individuals should be taught basic ways to avoid scams, like not sharing personal information or entertaining anonymous messages and calls.
Additionally, it is advisable to use exchange platforms regulated by UAE financial regulators by checking with bodies such as the Abu Dhabi Global Market (ADGM) and Dubai Financial Service Authority (DFSA). Also, with the increased cyber-crimes, the Digital Assets Crime Section of Dubai police was formed to deal with crypto issues.
Individuals are urged to always do their due diligence by Tarek Mohammed, the head of the Dubai Assets Crime Section at the Dubai Police. Each user is responsible for staying informed and enabling two-factor authentication.
3. Cybersecurity Investment
Both private and public sectors ought to allocate resources to foster cyber security infrastructure like incident response plans, regular security audits, and detection systems. The dangerous thing about crypto transactions is that it’s online, and their anonymous nature can lead to fraud. In fact, in 2021, victims of fraud lost up to 80 Million AED from crypto scam cases.
4. Information Sharing and Collaboration
An established framework for sharing threat intelligence among cyber security experts, businesses, and government agencies is key to countering emerging cyber threats effectively. UAE regulators need to continue to emphasize collaboration and information sharing. Emphasis on guidance on best practices, especially ADGM and DFSA, by the regulators, which also offers guidance and online tools to help entities comply with the regulations.
The UAE has unlocked a new economic growth and innovation era by embracing blockchain technology and cryptocurrencies. Nonetheless, this transition carries new challenges in the form of evolving cyber-attacks that attack the unique features of digital currencies. The UAE can ensure a secure and safe digital landscape despite emerging cyber threats by investing in technological solutions, enacting stringent measures and regulations, and encouraging a cyber-security awareness culture.
