Thu. Aug 5th, 2021

Credits: www.analyticsinsight.net

Cryptocurrency has sped up the rate of cybercrimes. How and why?

Over the past couple of years, the popularity of cryptocurrency has been skyrocketing. It has attracted millions of investors around the world. The recent success of cryptocurrency in the global market has convinced even the most skeptical critics of digital currencies to invest in it. As cryptocurrency has drawn investors into the market, similarly, it has also welcomed the most notorious cybercriminals.

Over the years, millions of cryptocurrency investors have been scammed out of real money. According to reports, in 2018, the losses from cryptocurrency crimes amounted to US$1.7 billion. Cybercriminals use both traditional and modern technology tactics to achieve their goals based on digital currencies transacted through an online database system called blockchain technology.

Bitcoin and other cryptocurrencies are the primary tools for criminals to extort money from large-scale companies, as they pay massive sums to regain control over their computers or any other legitimate currency.

The Role of Cryptocurrency in Cybercrime

Mining cryptocurrencies is a crucial step to ensure that the transaction is safe and the blockchain network is unaltered. There has been a hike in the number of crypto-jacking attacks, which exploits the power of the victims’ computers to mine cryptocurrencies. Another alternative to performing scams is ransomware attacks. For example, criminals will hack the business system or a system of an organization. By the time the enterprise realizes their site is down, it will not be accessible anymore; hence, overrides will not work. The ransom demand will come via mail or message providing a crypto address where the payment must reach for the company to get access to their site or machine. For ransomware attacks, Bitcoin is the most widely used digital currency.

The decentralization of cryptocurrencies provides an excellent opportunity for cybercriminals to perform malicious activities. They hack into the trading platforms and exchanges and steal money.

Crypto criminals appeal to people’s needs or greed by promising big returns. The founders of the fake cryptocurrency OneCoin frauded its investors of US$3.8 billion by convincing them it is real crypto. These criminal actors use digital assets to keep their illegitimate activities under the radar.

Why Do Criminals Use Crypto for Scams? 

Earlier, there were several ways to launder money. Ransomware payments were delivered through money transfers, using financial services by Western Union, prepaid gift cards, and also by the wiring of funds into bank accounts that are quickly withdrawn by the criminals.

But with the emergence of the digital ledger system called the blockchain, provides anonymity which forms the foundation for criminals to leverage Bitcoin and other cryptocurrencies to scam money.

Decentralization is one of the main reasons, why criminals are attracted to cryptos. It is unsecured and could easily be lost or stolen, and is not insured by government organizations. Cryptos like Bitcoin are anonymous; hence it is a perfect tool to carry out scams and other fraudulent activities.