May 19, 2022
  • May 19, 2022

How do cybercriminals use cryptocurrency?

By on February 23, 2022 0

Cryptocurrency has had many positive effects on the world. But since its invention, it has also become an important part of cyber crime. Prior to its arrival, cybercriminals had no convenient way to receive money. Now they can receive money anonymously from anyone in seconds.

The association between cybercrime and cryptocurrencies is now well known. Many people have even gone so far as to suggest that it should be banned as a result. But why is cryptography so popular with cybercriminals and how is it actually used?


Why do cybercriminals use cryptocurrency?


purple blockchain diagram

The popularity of cryptocurrency among cybercriminals is easy to understand. It was not invented to help cybercriminals, but many of its features are perfect for that purpose.

Cryptocurrency transactions are irreversible

Once a payment has been made using cryptocurrency, it is not possible for the sender to reverse the transaction. There is no payment protection on crypto payments. There is no bank to contact. Paying someone with cryptocurrency is the same as paying them cash.

It can be received anonymously

Anyone can create a cryptocurrency address in seconds and there is no need to provide any personal information. Banks and other financial service providers are required to follow strict know-your-customer (KYC) laws. It is not possible to open a bank account or use most financial services without verifying your identity. Cryptocurrency addresses, on the other hand, can be completely anonymous.

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It’s potentially untraceable

Cryptocurrency is not as hard to find as many people think. All transactions can be viewed on public blockchains. It is possible for the cryptocurrency to be tracked and if it enters an address linked to a person’s identity, the owner can be revealed. This, however, can be avoided with the use of mixers. These services essentially transfer cryptocurrency to so many addresses that it becomes untraceable.

It is probably safe to keep

A successful cybercriminal cannot deposit his income in a bank because there is a high risk that he will be asked questions about the origin of this income. The future value of cryptocurrency is obviously debatable, but if historical prices are anything to buy, keeping their income in the form of cryptocurrency can be a viable strategy. Unlike cash, cryptocurrency is also easily hidden and transported.

It’s easier than ever to cash out

There are now more ways than ever to convert cryptocurrency to cash. Provided the source of the illegally obtained cryptocurrency is sufficiently hidden, it can even be used for payment at a growing number of online retailers.

How do cybercriminals use cryptocurrency?


heap of various crypto coins

Cryptocurrency is now used in almost every type of cybercrime. Here are eight ways cybercriminals profit from cryptocurrency.

Flight

Cryptocurrency is easy to steal and large amounts are stolen by hackers every year. The biggest attacks are against cryptocurrency exchanges, but individuals are also targeted using a variety of techniques. This includes phishing attacks and keyloggers which are both designed to steal passwords. This allows cybercriminals to dump cryptocurrency addresses with no possible recourse for the victim.

Ransomware

Cryptocurrency is arguably responsible for the increase in ransomware attacks. Ransomware has been a threat for decades, but it wasn’t until cryptocurrency was invented that attackers had a way to demand large sums of money that could be transferred quickly and anonymously. All ransomware attacks now require the ransom to be paid in cryptocurrency. In large attacks, these demands amount to millions of dollars.

Other types of extortion

Ransomware is the most well-known type of extortion, and it’s also the most effective. But people can be extorted for all sorts of reasons. If a hacker finds any type of private information on a person’s computer, they can contact that person and demand payment in cryptocurrency in exchange for their silence. Many people are even extorted using entirely fabricated threats.

Stolen information

Cryptocurrency allows hackers to profit from stealing information they don’t actually use. Any type of personal information can now be sold, including identity documents and credit card numbers. When a data breach occurs in a large organization, data is usually sold in bulk in exchange for cryptocurrency. This leads to this data being used for further cyber crimes and makes hackers steal more of it.

Smaller hacks against private emails and social media accounts are also profitable for the same reason. Stolen accounts of all types are now resold for cryptocurrency.

Online scams


physical bitcoin, ethereum and ripple coins next to a sim card

Many online scams now specifically ask the victim to pay in cryptocurrency. Most internet users are not willing to use cryptocurrency for traditional purchases. But there are many scenarios where people are tricked into sending cryptocurrency to strangers. This includes both romance scams and investment scams. The cryptocurrency prevents the victim from getting their money back when they realize what happened.

Cryptojacking

Cryptojacking is using someone else’s device to mine cryptocurrency. This can be achieved in different ways. Some websites mine cryptocurrency on the device of anyone who visits them. Malware is also installed on victim computers to carry out the activity in the background. Some experts believe that cryptojacking is becoming more profitable than ransomware.


Payment for illegal services

Cryptocurrency makes it possible to sell illegal services anonymously. Cybercrime as a service is becoming increasingly common. This makes cybercrime more profitable and makes it easier for the average person to carry out attacks. Hackers are also available for hire and cryptocurrency allows them to be hired anonymously.

Payment for employees

Large cybercrime organizations are often structured similarly to traditional businesses. This includes employees of different levels and affiliate marketing agreements. Cryptocurrency makes all of this possible, allowing anyone to get paid without anyone revealing their identity.

Should cryptocurrency be more heavily regulated?

Cryptocurrency increases the profitability of cybercrime and some people have suggested it should be banned or more heavily regulated as a result. The counter-argument to this is that preventing the use of cryptocurrency will not prevent cybercrime.

As long as the Internet remains a popular tool for communication and e-commerce, there will be people who attempt to use it for fraudulent purposes. Many types of cybercrime do not rely on cryptocurrency, and many types that do can be carried out using alternative methods.

As the widespread adoption of cryptocurrency continues, the possibility of banning these currencies also becomes increasingly impossible.


Man holding cyber crime sign.
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