A Cryptocurrencies continue to evolve and to grow in popularity. But everyone who transacts in in one of these virtual currencies must navigate a minefield of operational, market, cyber and compliance risks.
Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and to verify the transfer of funds. They are not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
To comprehend cryptocurrency risks, one must first understand the features of blockchain – the platform on which the cryptocurrencies are based. Blockchain is a digitized, decentralized, public ledger of allcryptocurrency transactions. It allows market participants to keep track of digital currency transactions without central recordkeeping.