From scam to heist: the impact of cybercrimes on cryptocurrencies

Mohamad, Azhar (2024) From scam to heist: the impact of cybercrimes on cryptocurrencies. Applied Economics Letters. ISSN 1350-4851 E-ISSN 1466-4291

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Abstract

We analyse the impact of cybercrime, particularly cryptocurrency heists and scams, on dynamic conditional correlations and abnormal returns in cryptocurrency. Our high-frequency, hourly data set covers three years, from January 2020 to December 2022, and our results show that certain hacking events have a negligible negative impact on investors, especially when focusing on less popular tokens or coins. This new perspective has significant implications for the investment community. Existing literature generally assumes that the impact of cybercrime is situational and argues for increased awareness, proactive cybersecurity measures and multi-stakeholder collaboration in traditional financial markets such as equities and currencies. However, the cryptocurrency market — a relatively young and still developing area — has a unique dynamic. Less popular tokens or coins often have lower market integration and liquidity, indicating a lower impact of cybercrime. If such a token or coin already has a limited reputation or investor base, the overall negative sentiment may be further mitigated, lessening the expected negative impact.

Item Type:	Article (Journal)
Uncontrolled Keywords:	Cryptocurrency; Bitcoin; Cybercrime; Hack; Scam.
Subjects:	H Social Sciences > HG Finance H Social Sciences > HG Finance > HG221 Bitcoin/Cryptocurrency/Block Chain H Social Sciences > HG Finance > HG4501 Stocks, investment, speculation
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User:	Dr Azhar Mohamad
Date Deposited:	31 Jul 2024 14:38
Last Modified:	31 Jul 2024 15:46
URI:	http://irep.iium.edu.my/id/eprint/113546

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