The Intersection of Data Privacy and Cryptocurrency

Jan 25, 2024 10:20:01 AM

"Binance, among other cryptocurrency companies, has prioritised security for assets and user data as standard, leveraging a 360-degree approach to security that covers everything from Know Your Customer through to machine learning. Why? Because cybercrime is a business."

Two men checking the cryptocurrency markets

By Hannes Wessels, General Manager, Southern and Francophone Africa, Binance

In 2022, 1.2 billion records were revealed across just 35 of the biggest global breaches. In 2023, an independent study undertaken by Apple and the Massachusetts Institute of Technology found that the total number of breaches tripled from 2013 to 2022 and more than 2.6 billion records were exposed. The threats have reached, as the report said, historic levels. Data privacy has never been more of a risk and the need for solutions that resolve this complexity and embed rigid security within transparency, has never been greater.

This is one of the core messages of Data Privacy Week 2024. Running from 24-28 January, this week of awareness initiated by the National Cybersecurity Alliance is defined as an ‘international effort to empower individuals and businesses to respect privacy, safeguard data and enable trust’.

It is a key initiative as it focuses on bolstering the crumbling foundations of data privacy with visibility into the risks and complexities that come with living in the digital age. People are living their lives online and personal data flows into organisations, governments and corporations, powering them as smoothly as petrol does cars. And that flow is being tapped by ransomware, exploit vendors, cryptojacking, hacking and the multitude of threats evolving and adapting online today.

The situation is further complicated by the evolution of digital payment solutions such as cryptocurrencies. The latter has evolved from niche to next-generation financial solutions and users deserve to feel safe from digital threats, working on exchanges that are stable with solid features. Binance, among other cryptocurrency companies, has prioritised security for assets and user data as standard, leveraging a 360-degree approach to security that covers everything from Know Your Customer through to machine learning. Why?

Because cybercrime is a business. Protecting personal data needs to be the same. Fortunately, the African regulatory landscape is paying attention to the challenge. Over the past few years, the number of countries across Africa implementing data protection laws and regulations has increased considerably.

Currently, 36 of 54 African countries have data protection laws or regulations and 16 have joined the African Union Convention on Cyber Security and Personal Data Protection. However, varied regulations, complex laws and limited visibility into processes and platforms have made it challenging for companies to operate smoothly across the continent. Data laws and regulations in one region differ from those in another country and this has the potential to introduce vulnerabilities and complexities that can be exploited by cybercriminals, or even leave companies and individuals open to fines and risk.

Another challenge is that there remain some barriers to understanding and awareness. Individuals and organisations are still not completely aware of the depth of the data privacy problem and their rights when it comes to data protection and privacy. While there are regulatory and legal frameworks in place, they have to evolve faster to become more agile and in line with the threats. The same problem applies to security infrastructure – data security infrastructure is limited, skills and expertise are in short supply, and cybercrime has laser-focused on the continent because of these weaknesses and vulnerabilities.

These challenges are not being ignored. The African Union (AU) Digital Transformation Strategy for Africa and Data Policy Framework have both introduced significant support for organisations and individuals operating on the continent. These are being further driven by the Malabo Convention – the Convention for Cyber Security and Data Protection – which, as outlined in a post by Harvard Law, is a ‘promising point of convergence for data privacy’.

Africa hasn’t been left behind, it is catching up with the world while benefiting from best-practice regulatory innovations and evolutions from around the world. African countries are ensuring that data privacy remains at the forefront of security and planning, but they should not be the only vanguard on the security front line. Organisations must play a pivotal role in prioritising their commitments to data privacy and transparency.

Companies within the cryptocurrency realm are particularly under pressure to perform on the data privacy stage. This technology, this ubiquitous financial capability, has not disappeared or faded or died as predicted by experts over the years. Instead, it remains a consistently reliable form of interaction and transaction on the global market and, as a result, has a target painted on its digital back.

Companies within this sector must prioritise data privacy and security to ensure that organisations and individuals turning to digital currencies are assured of complete trust and visibility into their data and its protection. They also have to find a balance between user privacy and regulatory expectations – how can they ensure user privacy and data protection within the constraints of existing regulatory demands? How can they protect the individual while preventing crime?

It is a balance that Binance has focused on achieving, leveraging technological innovations such as blockchain encryption to enhance data privacy and security in financial transactions while remaining within the expectations of the law. That said, it is a balance that requires an agile mindset and constant collaboration with governments, advocacy groups and industry bodies to ensure the consistent delivery of a secure digital environment for financial services.

In addition to blockchain innovation and industry collaboration, Binance has put strict protocols and industry-leading technical measures in place that include real-time monitoring, 360-degree risk management systems, advanced data privacy tools, and end-user security education tools. We are committed to ensuring data privacy and transparency are embedded within the very foundations of our organisation, and to ensuring that cryptocurrency becomes synonymous with data protection, user visibility and financial innovation.

Hannes Wessels is the General Manager of Southern and Francophone Africa for Binance, the world's foremost blockchain ecosystem and cryptocurrency infrastructure provider, currently spearheading business operations in these regions.