Cybercrime Increases As Cryptocurrency Values Rise: Ways Crime And Cryptocurrencies Intersect

With Bitcoin and other cryptocurrencies' involvement in cybercrime, government interest increases.

Monero is now one of the top cryptocurrencies in use.
Wit Olszewski / Shutterstock

With Bitcoin and other cryptocurrencies' involvement in cybercrime, government interest increases.

Crime happens everywhere; there’s no doubt about it. But, cryptocurrencies may present a scenario that many criminals can’t pass up. Maybe it’s the thought of making millions of dollars, sometimes in an instant. That, coupled with the source activity being untraceable sounds alluring. Is that why, across the board, cryptocurrency values are skyrocketing? And, is that why governments everywhere are starting the crackdown?

Bitcoin May Fall Out Of Favor With Criminals, To Be Replaced By Other Cryptocurrencies

Bitcoin has been targeted for government regulation and criminal activity monitoring. This has meant a move by cybercriminals to other, more private crypto-coinage. According to an article by Bloomberg Markets, “Privacy coins such as Monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin.” There are other reasons to move past bitcoin. Bitcoin is quite slow when it comes to processing time. To record a bitcoin transaction can take more than 10 minutes. Newer currencies, like Monero, take seconds to process.

Some Criminal Activities Lend Themselves To Using Cryptocurrencies

And, certain types of crimes appear to lend themselves more to using cryptocurrencies. For instance, ransomware, “which involves hackers freezing victims’ computers and demanding payment,” according to a Fortune article, has typically involved instructions on how to purchase bitcoin to make payment. However, now the instructions may point toward Monero as the cyber currency of choice.

Monero is becoming the cybercriminal's cryptocurrency of choice.
  Inked Pixels / Shutterstock

Cryptocurrencies, Themselves, Have Been The Targets of Crimes

Some of the biggest news surrounding cryptocurrencies relates to crimes committed to obtain them. For instance, hacking of transactions to acquire cryptocurrency. Last Friday, a cryptocurrency exchange based in Japan, Coincheck, reported a massive hack. This breach resulted in the theft of millions of dollars worth of the cryptocurrency, NEM. From the Guardian, “the company detected an ‘unauthorized access’ of the exchange and later suspended trading for all cryptocurrencies apart from bitcoin.” Later, company officials discovered a theft of close to $400 million. Coincheck has announced that it will be reimbursing in cash virtually all of the people who lost NEM coins.

Nefarious Purchases With Cryptocurrencies

All sorts of criminal purchases are accomplished via cryptocurrencies. Weapons purchases, drug purchases, and payments to ISIS have been made this way. According to Investopedia, even “the now-defunct Silk Road online drug market is a case in point. Its founder credits Bitcoin for its success.”

Government Involvement Is Inevitable

Even without cryptocurrency involvement in criminal activity, it is inevitable that governments will continue to get involved. It is a matter of control, and governments see a threat to that control. Without better jurisdiction of dealings and activity, it is harder for governments to know what is transacting. A large source of revenue could potentially disappear without proper regulations in place to track activity. Right now, some governments have issued outright bans on cryptocurrencies. Others have implemented bans on trade. But, no matter how governments react, they are now considering cyber-coinage and its impact on trade and transactions.