Cryptocurrencies: Is it Pay Day for Cybercrime?

Dr Mike McGuire, a Senior Lecturer at the University of Surrey, teamed up with a virtualisation tech company, Bromium, and produced ‘Into the Web of Profit’ – a research study investigating the socio-economic and spending differences among cybercriminals. The headlines read like the script of a B list Hollywood movie with 15% of cybercriminals spending to gain status – high stakes gambling, flash cars, gold, drugs, jewellery and prostitutes.

So how does it work?

Cybercrime, Dr McGuire states, is not a business, it is an economy. Top cybercrime earners include sales of prescription pharmaceuticals, counterfeit products, corporate trade secrets, intellectual property theft and the data trading market (including stolen passwords, credit cards and identity theft).

So how do cybercriminals convert their ill-gotten gains to cash? Cash can readily change hands under the pretence of paying for a service – online platforms like AirBnB, and Paypal are allegedly not immune to being used for the exchange of illegal funds.

But what about the more shadowy world of cryptocurrencies? According to Europol about £100 billion has been laundered this way.

Cryptocurrency (n) A digital currency in which encryption techniques are used to regulate the generations of currency and verify the transfer of funds, operating independently of a central bank.

To keep this blog brief, what you need to know is that decentralised cryptocurrencies now provide an outlet for personal wealth that is beyond any formal control. As Interpol succinctly puts it:

There are no borders in cyberspace.

The key to cryptocurrency success is in the confirmation process – the ‘blockchain’. Once a transaction is confirmed, it can’t be reversed. And here is where computer experts come in – called ‘miners’, only miners can confirm a transaction. They add your transaction to the currency ‘database’ and it becomes part of the blockchain. Although their knowledge of cryptography and ciphers make their work sound like a Dan Brown novel, it is simply mathematics, though so advanced it would probably make the average head spin.

What is the future of Cryptocurrency?

According to the market of cryptocurrencies is ‘fast and wild’. For crime purposes the higher the level of anonymity the better, as at some point the cryptocoin of choice must be exchanged at some point for ‘real money’. Altcoins, Zcash, Dash, Verge, NavCoin – new variants are popping up and digital transactions are becoming virtually untraceable.
It seems that organised cybercrime is just that, organised. Structured, well-prepared, methodical and controlled – it is being run on an industrial sized platform with access to borderless currencies and law enforcement lagging one pace behind.

If you are interested in attending our Cyber Awareness Training Session, we have spaces available on 22 May 2018 in Royal Tunbridge Wells where we will focus on different types of threats, what they mean for your business and how to stay one step ahead.

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