All posts in “Entrepreneurship”

Where CEOs Go Wrong With Brand ID

Brand ID is key to every company’s success and growth. Why then do so many senior executives at so many different companies screw it up? When you come up with a winning brand ID, it’s OK to build on it and to change it for the better, but not for the worse.

Customers buy from you based on your brand ID. If that changes, then customers may change their buying habits as well. It happens more often than you can imagine.

If you are fortunate enough to build a winning brand, you must do everything in your power to either maintain or increase the brand value and brand ID with your customers and the marketplace.

Following are a few examples of brand ID gone wrong.

Dasani Water Diluted Its Brand ID Value

One is Dasani water, from Coca Cola. Water bottles are very popular. Water is water. The problem with most is the plastic bottle is thin and crinkly. Only a few brands use a heavier clear plastic. This appeals to customers and establishes a kind of brand ID.

Dasani was one of those brands. Sure, it cost more than competitors, but customers got what they paid for — perhaps not from the water, but from the sturdier bottles.

Now, Dasani water bottles seem to be thinner and crinklier. That means Coca Cola diluted the brand ID. It is no longer a fit for customers who want the thicker plastic. Plus, it is still priced at a premium compared to competitors.

Why does Coca Cola think it can lessen the Dasani brand ID, charge the same price, and not take a hit in sales? It is one of the world’s largest and best-known beverage companies. It should know better.

The rule is simple. If you cut costs and dilute your brand ID, your customers will notice. Period. This is a mistake too many companies make.

Dunkin’ Donuts, Krispy Kreme Diminished Their Brand IDs

Dunkin’ Donuts used to have TV commercials showing an old man with a mustache stumbling out of bed in the middle of the night mumbling, “it’s time to make the donuts.” That was back in the day when the donuts were always soft, fresh and delicious. In fact, the policy was to throw away donuts after four hours and replace them with new ones.

That’s why customers loved them, and Dunkin’ Donuts was a huge success back then. Today, walk into a Dunkin’ Donuts and you’ll find a stale product unless you get very lucky. It’s not worth the trip. This is a big disappointment to the customer.

Dunkin’ Donuts reduced its brand ID and gave customers less than what they expected. This is why the company is not the favorite in the space any more. It created its own problems by trying to save money.

Krispy Kreme donuts took its place for a while. Its shops have a red sign out front that says, “Hot Donuts Now.” When lit, it’s a magnet for people driving by, who will line up to get a fresh, fluffy, melt-in-your-mouth donut. This was a hit, and customers loved it. It was legendary. There was always a line of cars when the red sign was on. It created a strong brand ID.

Today, Krispy Kreme is screwing with its brand ID. It seems that red sign is rarely lit. When it is, a line of cars still materializes to wait for fresh donuts. However, that sign was lit more times than not years ago, but today it’s hardly ever on.

This is very disappointing to customers who would like to go back to the old days when they more often could enjoy fresh donuts that would melt in their mouth.

KFC and Colonel Sanders

Kentucky Fried Chicken, or KFC, was terrific back in the day when Colonel Sanders went from store to store and trained workers how to make the perfect fried chicken. Pieces were perfect. They were large and plump and juicy and not overcooked. Customers loved it, and that practice built a strong brand ID.

Today, KFC is very inconsistent. Walk into one KFC and it’s a good experience, and walk into another and it’s terrible. In too many stores the chicken is dry, the pieces are small, and it’s not worth the money. This disappoints customers and breaks the brand ID the colonel built over time.

Why do companies that invest a lot of time and effort into building an incredible brand ID take the wrong path and fail? Why do they choose to disappoint their customers to the point where they simply don’t visit any longer?

Do they think customers won’t notice? If so, they are very wrong.

Some companies have a CEO who is interested only in the numbers — who doesn’t understand that a customer’s relationship with a brand is built on love, not money. When they miss this point, they often make disastrous mistakes. Often, they blame the marketplace or something else.

In addition to being great business people, CEOs and senior executives need to understand the love their customers have for their brand. It’s really that simple, but that’s where most companies go wrong.

Too many company leaders are more interested in the numbers. They don’t understand their own product. They don’t love the product.

The CEO Must Love the Product to Build a Strong Brand ID

The secret to ultra-successful companies is this: The CEO must love the product the same way the customer does — the same way the founder did.

CEOs who can’t fall in love with the products they sell are in the wrong job.

Of course CEOs must be focused on the numbers. However, they also must understand their customers. They must understand the secret brand ID they have built over time in the marketplace. They must continue to build and strengthen their bond with the customers.

If they don’t, then ultimately they will lose.

There are many examples of brand ID missteps. In fact, I am sure if you could easily come up with a list of your own, recalling places you used to love doing business with, but that changed over time, so that the spark no longer is there.

If you’re in control of a brand ID, think of the customers you risk losing to the competition, the same way Dunkin’ Donuts lost to Krispy Kreme. If Krispy Kreme is not as consistent as it used to be, which donut shop will be the next great brand?

CEOs in every company in every industry must ask themselves this question every day. Sure, they must be great at numbers, but they also must connect with their users on a personal level. They have to be great at both numbers and emotion.

CEOs and executives must be in love with their product. They must want to share that love with the marketplace. I remember the CEO of Coca Cola always had a Coke in his hand when he did media interviews a decade or so ago.

That’s an important secret to success. Love the brand. That’s the only way to build your brand. That’s what brand ID is all about.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.

Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent analyst, consultant and speaker. Email Jeff.

ARM Joins Firms Shunning Huawei’s Business

British mobile device software design firm ARM has ordered its staff to stop working with Chinese smartphone giant Huawei and its subsidiaries, in compliance with a ban issued by President Trump, the BBC reported Wednesday.

ARM Joins Firms Shunning Huawei's Business

Under an executive order Trump signed last week, foreign companies and individuals are prohibited from buying United States technology and services, among other things, without first obtaining special approval from the U.S. government.

The U.S. Commerce Department has added Huawei and 70 affiliates to its Entity List, which imposes restrictive licensing requirements for purchasing U.S.-made parts and components.

ARM, owned by Japan’s Softbank’s Vision Fund, has eight offices in the United States. It apparently believes it’s affected by the Trump administration’s ban because its designs contain technology that originates in the U.S.

Faster Than the Speed of Light

“This story is changing so much so quickly, it’s hard to say anything definitive,” remarked Gerrit Schneemann, senior analyst at IHS Markit.

  • Google banned Huawei from Android updates and Google apps after Trump announced his ban;
  • One day after issuing his executive order, Trump gave Huawei a 90-day extension, to Aug. 19, for existing products and services;
  • Google followed suit, extending its services;
  • Chipmakers Intel, Qualcomm, Xilinx and Broadcom said they will stop selling to Huawei;
  • Chipmakers’ stock prices plunged following the news;
  • British Telecom-owned network EE said it will exclude Huawei phones from approved devices for its 5G services coming later this year;
  • Vodafone, the UK’s third-largest mobile operator, said it won’t sell the Huawei Mate 20 X 5G when its new network goes online July 3;
  • Major Japanese mobile carriers KDDI and Softbank will postpone sales of Huawei’s new smartphone models for their upcoming Au and Y!mobile services, while another carrier, NTT Docomo, will stop taking orders for new Huawei handsets; and
  • Microsoft has stopped selling the Huawei MateBook X Pro online.

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The cutoffs from Google and Microsoft “are likely the most painful, because once the stay is lifted, that will deny patches for Huawei customers’ devices,” said Rob Enderle, principal analyst at the Enderle Group.

That “will make their related products excessively risky for buyers,” he told the E-Commerce Times.

“I’m sure there’s a better-safe-than-sorry element to [cutting ties with Huawei] — not just for ARM, but in general,” Schneemann told the E-Commerce Times.”

Patchwork Quilt

National security is the stated reason for Trump’s ban, but “the hardware isn’t the problem,” noted Chris Taylor, research director at Strategy Analytics.

“If governments and consumers are worried about security and privacy, they should ban or regulate Google, Internet-tracking apps, Android, Facebook, Twitter, and most apps running on phones,” he told the E-Commerce Times.

“The sanctions on Huawei amount to taking it hostage for leverage in trade negotiations with China,” Taylor said. They “set a bad precedent and are not warranted.”

On the other hand, U.S. bans on exports of certain critical items to its allies “have kept supercomputers from being sold to Russia and states that espouse terrorism,” noted Ray Wang, principal analyst at Constellation Research.

“The Huawei ban is a continuation of the greater discussion beyond trade. We are dealing with national security, trade, sovereignty and different world views,” he told the E-Commerce Times.

The U.S. also is considering blacklisting five Chinese video surveillance vendors over the Chinese government’s treatment of its Muslim Uighur minority, Bloomberg reported.

Making Companies Poor Again

Huawei is the smartphone industry’s No. 2 original equipment manufacturer, behind Samsung. It shipped more than 59 million units in Q1 according to IHS Markit.

ARM technology is used in Huawei’s Kirin chipsets. Its annual sales to Huawei total between US$320 million and $345 million, Constellation’s Wang said.

Huawei has vowed to develop its own technology, but that would be a steep hill to climb.

The ban will cripple much of ARM’s 5G plans and business outside of China, and create huge problems with IP in China, Enderle pointed out.

Huawei bought about $21 billion worth of chips from outside vendors last year, according to Reuters. Its HiSilicon chip division produced another $7.5 billion worth of chips.

China might replace ARM and x86 processors because of the ban, which could cost global processor sales the permanent loss of “a ton of Asian business,” Enderle noted.

Other suppliers that will be impacted:

  • Corning Gorilla Glass;
  • Micron Flash storage;
  • Skyworks and Qorvo 3G and LTE chips;
  • Chip design software vendors Cadence Design Systems and Synopsys; and
  • U.S. suppliers of specialty lasers and modules such as NeoPhotonics, Lumentum and Finisar.

Killing 5G Hopes

The impact of the U.S. ban on Huawei’s telecom networking customers is unclear.

Huawei has 29 percent of the global telecom equipment market, according to the Dell’Oro Group.

It is a major player in the nascent 5G arena, and the U.S. ban “will make the wireless industry more dependent on 5G infrastructure equipment that’s not as advanced as Huawei’s,” Strategy Analytics’ Taylor noted.

This will “raise costs and delay rollout, particularly where contracts have already been awarded to Huawei,” Taylor said. “Strategy Analytics is still trying to quantify this.”

Huawei could end up being the dominant 5G player in China, with Western companies locked out, Enderle warned.

There are already two camps in high tech, Constellation’s Wang said. “It’s China versus the U.S., and this will expand into networking, chips, 5G and IoT standards.”

Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. Email Richard.

Better Customer Satisfaction Through AI-Enabled CRM

You don’t have to be entrenched in the tech world to have heard the term, “artificial intelligence,” but what is artificial intelligence, or AI, as it’s commonly known? Simply put, AI is the simulation of human intelligence processes performed by machines or computer systems.

Nowadays, AI is being used to carry out many jobs previously held by humans, and while this concept may sound futuristic and even scary to many, there’s no need to panic. Most AI functions are designed to make life easier.

Whether you know it or not, most of us use AI in some form every day. Only 33 percent of people think they use AI, according to one study, but in reality more than 77 percent use some form of AI-powered devices or services.

For example, AI is used by most banks to personalize your experience on their mobile apps, while music services use AI to track your listening habits and then use that data to suggest other songs you may like to hear.

AI and Predictive Lead Scoring

As it relates to business, AI can be beneficial when used in systems and applications by automating repetitive, menial tasks that people used to do manually, thereby increasing company productivity and profitability.

More specifically, sales and marketing tools such as customer relationship management (CRM) software or sales automation platforms that contain AI technology not only can do simple, tedious tasks such as data entry, but also can identify patterns and trends in that data in just seconds, and tell users how best to use it.

With real-time information, sales teams become better equipped to service customers, respond to requests or challenges, and even predict customer buying behaviors. Understanding customer expectations and knowing how to manage them in advance is important not only for the timely delivery of existing products, but also for the promotion of new ones that customers may want or need downstream.

One such ability AI can offer a CRM is predictive lead scoring. Lead scoring is a way businesses and organizations identify and prioritize the highest-quality leads for their salespeople to connect with through a type of scoring system. As a business grows, this helps salespeople manage their time and pursue those leads that make the most sense.

Lead scoring with AI uses algorithms instead of people to predict which leads in a business’ database are qualified. Not all parameters are the same when predicting lead scores. AI easily can factor in information such as forms completed on your website, behavioral data, social media information, demographics, and even external information posted about your company.

With AI for predictive lead scoring, algorithms evaluate what information your customers have in common, as well as what information your leads that did not convert have in common. From there, the algorithm determines a formula that will organize leads for you automatically, so you easily can identify the most qualified ones. Imagine having to do this manually, and you can understand why AI is important for predictive lead scoring.

AI and Sales Forecasting

Along the same lines is the use of AI in sales forecasting. Sales forecasting is the process of estimating or looking ahead to sales downstream. Accurate sales forecasts can help companies make data-driven business decisions and predict performance both in the short and long term.

Sales forecasts can be based on industry comparisons, market trends, or even past sales data. With AI, companies can gain a better understanding of future revenue, improve resource allocation, better align teams with objectives, and calculate growth models.

If setting prediction parameters around your sales pipeline is difficult or unclear, or if sales forecasting is inaccurate, despite lots of legacy or current CRM data, you may need AI support in this regard.

AI and Natural Language Processing

Another powerful feature of an AI-enabled CRM is natural language processing (NLP). There are several ways people define NLP, but most tend to describe it as the ability of computers to understand and interpret human language the way it is written or spoken.

When a machine processes texts or spoken words from humans, they’re looking at data in 1s and 0s and not really hearing words. For AI to understand what you’re saying and turn those words into an action, NLP comes into play. Definitions aside, NLP can be used in several ways to enhance customer experience through a CRM.

For example, it can be used to determine what customers want from an email or text-based message. Customers or prospects often make similar requests through emails. A financial-based organization, for example, may receive daily messages from customers requesting new checks, or to open a new account, apply for a new credit card, or report a stolen card. Natural language processing can scan these messages and begin working on them before sales and customer support get involved.

What’s more, NLP then can determine which customer requests to prioritize. Reporting a stolen card is clearly more urgent than needing new checks. NLP can push customer and prospect requests that are urgent or time-sensitive to the front of the line, where sales and customer service can respond quickly.

When enabled through AI, NLP also can examine customer email interactions to get a better understanding of their experience, whether positive or negative. An organization that leverages insights in this way can remedy customer issues quickly, before they escalate.

AI Tracking

Sales departments also can use AI to record voice meetings and phone calls, time-stamp specific notes, obtain transcripts, and even identify topics or words of specific meaning — like “budget,” “pricing” or “actions items” — or even target specific people. Sales teams then can return to exact moments in conversations after the call, glean specific insights, and combine them with existing CRM data to determine a best course of action.

Going deeper, AI can be used to analyze speaking patterns, word choices, or voice inflections to determine a caller’s emotions and offer resolution recommendations to sales reps, which could include telling users to slow speech pace, soften their tone, or even prompt supervisors to get involved when necessary.

One of the best ways for businesses to understand the needs of their customers is through tracking feedback, which can be collected through questionnaires, reviews, online comments and more.

A well-constructed survey can provide insightful and quantitative data, discover problems or challenges, and ultimately help a business gauge its progress or improvement over time. AI technology can not only streamline customer feedback programs and tactics, but also help companies eliminate unnecessary actions by evaluating communications that happen naturally every day.

At their core, CRMs are designed to store customer information and lots of it. AI easily can be applied to keeping customer records and information up to date, with little human help or data entry. These days, there is significantly more information than name, address, phone number and email that can be harvested and added to a customer’s profile, including social media channels, applications used, and even popular geolocation visits.

While AI can help sales teams dig through industry and social media data, it also can help companies properly allocate dollars to increase account-based marketing’s return on investment. Sales leaders can be handed high-value accounts or prospects that that meet very specific criteria, as well as search for others that are actively looking to buy. This can help marketers focus marketing and advertising funds toward prospects with the highest buying interest and prioritize engaged leads.

Who Needs AI?

Now that we’ve touch on a few ways AI can be leveraged in your business’ CRM system, the question is, do you really need it — or is it just another superfluous addition that won’t provide you with any real value? Not surprisingly, the answer depends on your business.

The common denominator, however, is this: The more data your business collects about customers and prospects, the greater the need for a CRM solution that can not only analyze all the data, but also provide useful insights and recommendations.

The move toward more powerful and more efficient CRM systems that reduce costs and save time is now possible thanks to AI. In today’s digital age, prompt, personalized and predictive services are essential to guaranteeing customer satisfaction and creating brand loyalty.

Businesses that utilize the full power of their CRM will find value in an integrated AI tool. On the other hand, organizations that struggle with their CRM, or with figuring out if they need one, likely will find AI confusing and unnecessary.

At the end of the day, CRM and AI are just tools from the sales and marketing toolbox. Neither replaces a thoughtful marketing strategy targeted at the right time, at the right audiences, and in the right context.

Conversely, a solid marketing strategy is only as good as the technology it sits on. Before leaping into the AI waters, master the fundamentals of your existing CRM. Once you’ve done that, unleashing the power of AI will help strengthen your sales and marketing teams and improve customer satisfaction.

Arun Upadhay, CEO and founder of LionOBytes, is a technology expert and serial entrepreneur. He has a proven record leading teams and producing cutting-edge IT solutions. His experience spans various continents, industries and corporate sizes (startup to Fortune 500). His latest venture is LionO360, a cloud-based CRM designed specifically for small to medium-sized businesses. Upadhay holds an MBA from Temple University’s Fox School of Business and Management.

EU’s Counterattack on Junk News May Help Protect Elections

Government efforts to minimize the effects of junk and fake news circulating on social media ahead of this week’s EU parliamentary elections may have succeeded, suggest results of a study conducted by Oxford University’s Computational Propaganda Project.

The European Commission undertook targeted actions to counter junk news last year. It rolled out plans to build capacity for joint responses to misinformation campaigns in the EU; launched campaigns to raise awareness among voters; took legal and regulatory actions to force social media companies to disclose financial information about political campaign advertising; and criminalized hate speech and illegal content.

The Computational Propaganda Project in April and May examined tweets and Facebook pages in seven European languages: English, French, German, Spanish, Italian, Polish and Swedish.

Among its findings:

  • Less than 4 percent of sources circulating on Twitter during that period were junk news or known Russian outlets;
  • Overall, links to mainstream outlets accounted for 34 percent of the links shared onTwitter;
  • On Facebook, many more users interacted with mainstream content overall;
  • However, individual junk news stories on Facebook still drew up to four times the number of shares and likes as even the best, most important professionally produced stories; and
  • The most successful junk news stories in the data set collected tended to revolve around populist themes such as anti-immigration and Islamophobia. Few expressed Euroskepticism or directly mentioned European leaders or parties.

Prolific German and Italian junk news outlets, such as Journalistenwatch and Il Primato Nazianale, “received far fewer total likes, comments and shares than the equivalent professional news sources,” the researchers said.

The reduction in reliance on junk news can be attributed to “emotional inoculation,” remarked Michael Jude, program manager at Stratecast/Frost & Sullivan.

“When somebody is constantly barraged with emotionally charged language, over time they become desensitized to it. Fake news is usually very emotionally charged,” he told the E-Commerce Times.

Nobody can survive on that kind of fight-or-flight response constantly, Jude observed. “When every other foot of land has a lion on it you soon get used to lions.”

The Methodology Used

The researchers investigated the following:

  • What type of political news and information social media users were sharing ahead of the vote in the seven languages studied;
  • How much of that news and information was extremist, sensationalist or conspiratorial junk news;
  • What engagement those sites had on Facebook and Twitter in the weeks leading up to the vote; and
  • What were the most common narratives and themes relayed by junk news outlets.

They collected nearly 600,000 tweets relating to the EU Parliamentary elections from about 188,000 unique users between April 5 and 20, and they extracted about 138,000 tweets containing a URL link, which pointed to a total of about 5,800 unique media sources.

Sources that were shared five times or more between April 5 and 20 were classified manually by nine multilingual coders. Each source was coded individually by two separate coders. Nearly 91 percent of all links shared were successfully labeled.

The researchers also extracted the five most popular sources of junk news in each of the seven languages studied and measured the volume of Facebook interactions with these outlets from April 5 to May 5, using the NewsWhip Analytics dashboard.

They computed the same metrics for each source, and then conducted a thematic analysis of the 20 most engaging junk news stories on Facebook during the data collection period.

Home-Grown Garbage

Overall, the researchers found “very low proportions of junk news and almost no content from known Russian websites,” except a few links to RT and the Sputnik news agency, which made up less than 1 percent of traffic in Swedish, French and German.

Homegrown, alternative or hyper-partisan media outlets constituted the bulk of identified junk news sources.

Content produced by independent citizens, civic groups, and civil society organizations, including a number of get-out-the-vote initiatives, accounted for 16 percent of German-language traffic and 21 percent of English-language traffic.

However, “the issue is not Russian websites, but the infiltration of other websites by Russian influence,” noted Ray Wang, principal analyst at Constellation Research.

“I expect more meddling from inside the chicken coop,” he told the E-Commerce Times. “The Russian — and to some extent Chinese — infiltration is happening inside the network, not outside.”

Facebook has been working hard to stop the spread of false news, a spokesperson said in a statement provided to the E-Commerce Times by company rep Lauren Svensson.

“Actors seeking to profit from misinformation are highly motivated and continue to employ new tactics to garner clicks, so it’s possible to pick out specific examples of things we miss and there will occasionally be false news posts that perform well,” the spokesperson said.

“What we’re really interested in is the overall amount of misinformation on Facebook, and whether that’s trending down,” the spokesperson noted. “As this report finds, overall, mainstream media coverage of the EU elections performed better than junk news on Facebook, both in terms of publisher following and engagement.”

With respect to engagement, however, the researchers found that individual junk news stories on Facebook drew up to four times the number of shares and likes as even the best, most important professionally produced stories.

Vigilance Is Key

Overall, it seems that many people have lost faith in political and information dissemination systems.

In a survey of 400 Americans aged 18 and older, which ExpressVPN conducted last fall through Google Surveys,

  • 63 percent of respondents said they lacked trust in voting systems;
  • 60 percent of respondents did not trust the news media, social media, or election candidates;
  • 28 percent trusted the news media;
  • 6 percent of respondents trusted social media; and
  • 6 percent of respondents trusted the candidates.

One in five adults in the United States get news through social media, the Pew Research Center has reported.

“Alternative sources are gaining traction,” said Constellation’s Wang, “as media distrust increases.”

Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. Email Richard.

Cybercriminals Score Billions in Cryptocurrency Thefts

By Peter S. Vogel & Chelsea L. Hilliard
May 21, 2019 10:05 AM PT

Is it possible that any of us are at all surprised to learn that in just the first quarter of 2019 more than US$1.2 billion worth of cryptocurrency was stolen? Probably not. This story follows the old line from bank robber Willie Sutton who is credited with saying that he robbed banks “because that’s where the money is.” So not much has changed. Cryptocurrencies are not exactly money, though, even if they do have a market value.

In 2019, protecting unregulated cryptocurrencies is much more complicated than securing monies held in traditional banks. As the global markets increasingly utilize cryptocurrencies, new cybercriminal threats emerge. Even the largest cryptocurrency exchanges have become vulnerable, as we saw earlier this month, when Binance suffered a loss of 7,000 bitcoin, to the tune of roughly $41 million dollars, thanks to sophisticated hackers.

So what are lawmakers doing to protect cryptocurrency holders?

Legislative Moves

We are starting to see the emergence of anti-money laundering (AML) protections around the world, including from FINRA (Financial Industry Regulatory Authority). Although it is not a government entity, FINRA is “a not-for-profit organization authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly.”

FINRA’s stated purpose behind its AML rules:

…to help detect and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.

The Asia/Pacific Group (APG) also has established AML and counter-terror financing (CFT) regulations that cover cryptocurrencies.

In addition, the Financial Stability Board (FSB), whose members include the U.S., the European Union, and some 20 other countries, has taken steps to address the unique problems posed by cryptocurrencies. The FSB last month published its crypto-assets regulators directory “to provide information on the relevant regulators and other authorities in FSB jurisdictions and international bodies who are dealing with crypto-asset issues, and the aspects covered by them.”

Who’s watching all of these cryptocurrency thefts, scams, and frauds?

Crypto Crime Tracking

The Anti-Phishing Working Group has tracked phishing and malware attacks against bitcoin and other cryptocurrencies since 2011. Last year, it established a separate Working Group for Crypto Currency. The APWG Crypto Currency Working Group does the following:

Helps protect cryptocurrency exchanges, wallets, investment funds and consumers against loss of cryptocurrency assets due to phishing and targeted attacks.

Enables cryptocurrency exchanges to submit live phishing information to the APWG eCrime Exchange (eCX) and get that data distributed into Web browsers, email clients and other security products in real-time, protecting more than 100 million consumers. Of course, this is now important because all businesses are vulnerable to phishing and malware attacks, which are in the news every day — so much so that hardly anyone ever raises an eyebrow.

Surely the APWG Crypto Currency Working Group will continue to be very busy given the scale of Cybercrime today.

Where is all the “money” going? … Offshore, apparently.

In the past two years there has been a sharp increase in cross-border bitcoin payments, up some 46 percent since March 2017, according to a CipherTrace Cryptocurrency Intelligence report. The likely reason for this noteworthy increase relates to traceability. Given the limited controls over cryptocurrencies and the decentralized global market for trading them, the lack of uniform regulations from country-to-country makes it difficult for enforcement agencies to trace the stolen funds.

Once moved to offshore exchanges in unregulated countries, cryptocurrencies become incredibly hard to track, often leaving U.S. authorities in the dark. While global regulations are in the works, it does not seem these efforts can keep pace with cybercriminals looking to cash in on a relatively defenseless market.

How to Avoid Phishing and Related Malware

There are simple things that cryptocurrency companies can do to reduce the risks associated with phishing attacks and related malware. For instance, regularly train all employees to be alert for phishing emails. Based on current statistics, less than 50 percent of businesses provide phishing training.

Some sources of phishing attacks often go unnoticed. Virtually every business in the world allows employees to use cellphones, tablets and personal computers (aka BYOD — bring your own device). So cybercriminals know that those devices are entry points for phishing attacks and malware.

Another problem in today’s world is businesses’ failure to backup data files properly, so that if there is a malware attack the business can recover. Since the time from intrusion to detection is eight months, according to the FBI, what’s happening during those eight months?

One thing is that cybercriminals are technically savvy enough to know that if they create malware in the backup of data, then the ability to reconstruct data likely will be impaired. A cybercriminal who has eight months to study backup procedures can figure out how to do the most damage by destroying data.

During those eight months of undetection, cybercriminals also can study the blockchain technology that hosts the cryptocurrency. So it should come as no surprise that KPMG recently issued a recommendation that blockchain developers need the mentality of cybercriminals.

Peter VogelPeter Vogel has been an ECT News Network columnist since 2010. His focus is on technology and the law. Vogel is Of Counsel at Foley Gardere, Foley & Lardner LLP, and focuses on cybersecurity, privacy and information management. He tries lawsuits and negotiates cloud contracts dealing with e-commerce, ERP and the Internet. Before practicing law, he received a master’s in computer science and was a mainframe programmer. His blog covers IT and Internet topics. Email Peter.

Chelsea HilliardChelsea Hilliard has been an ECT News Network columnist since 2019. As an associate at Foley Gardere, Foley & Lardner LLP, she focuses her business litigation practice on trade secret noncompetition and securities enforcement. She also helps clients with complex electronic discovery disputes and has been recognized as Texas Rising Star attorney by Texas Monthly, and a Top Lawyer under 40 by D Magazine. Email Chelsea.