With over a decade since the introduction of Bitcoin (BTC), the first and the most prominent cryptocurrency, digital currencies continue to redefine the global digital economy. Although it is being speculated that cryptocurrencies may have the potential to replace the traditional fiat currencies and transform the financial services landscape, however, the shortcomings of the network cast doubts on the possibility. Yet how did it come this far so quickly? The year 2009 marked a defining moment for cryptography and the peer-to-peer electronic cash system when an individual (or group) under the pseudonym Satoshi Nakamoto publicly released Bitcoin using the Blockchain software. This was indeed a break from the past, having seen the failure of DigiCash (the first digital cash and electronic signature), founded by David Chaum in 1990.
As a result of the unregulated nature of cryptocurrencies, and the level of anonymity and transnational existence makes it an attractive opportunity for cyber offenders, money launderers, and criminals alike. Cryptocurrencies have thus proven to be both a tool, and target for a multitude of cybercrimes. However, it is important to acknowledge that the technology underpinning Bitcoin’s operation is not inherently criminal, nor are persons seeking levels of anonymity in a modern world of intrusive, universal surveillance.
It is against this background that this piece seeks to understand the relationship between cryptocurrency and cybercrime, with an outlook into the future of Blockchain in solving global criminal financial-related activities.
Cryptocurrencies can be used as a tool for criminal activities through different ways including – Crypto Exchange Hack, Initial Coin Offering (ICO) scams, Initial Exchange Offering (IEO) Scams, Fake Giveaway, Airdrops, Crypto Faucet and Mining, Crypto Jacking, Phishing, Spam, Investment Fraud, Rug pulling in the decentralized finance ecosystem, Malware and Ransomware. For instance, a typical ransomware attack on a company or organization might proceed like this: Executives realize their business website is down or systems inaccessible, and administrator overrides don’t work. A ransom demand email arrives, providing a Bitcoin address or a Cryptocurrency address where the payment must be made before the company system becomes operational. The victim copies the string of alphanumeric characters (the wallet address) and deposits the Bitcoin.
Bitcoins’ security issues became a news with the bankruptcy of Tokyo-based Mt. Gox in February 2014. Mt. Gox was one of the largest digital currency exchangers until its computer system was hacked and approximately $477 million worth of Bitcoins were stolen prompting it to declare bankruptcy.
In recent time, Chainalysis – a Cryptocurrency Tracking Company reported that after a drop in scam revenue in 2018, 2019 was the biggest year for cryptocurrency scams. Scammers tripled their revenue, bringing in $4.30 billion worth of cryptocurrency from…
Read more:Cryptocurrency and cyber theft: Issues of global concern
