Cryptocurrency (Bitcoin, Ethereum and the rest) is fueling a crime wave that is without precedent in human history. Computers and networking are the lawless continent on which criminals go wherever they want, going into factories, stores and homes, stealing data in massive amounts to sell and use to enable more crime. That crime continues to grow. Bitcoin, the software built on computers and networks, has added the element of anonymous payments to and between criminals. Criminals world-wide have been inspired by this near-instant, secret way to pay and accept money to ratchet up existing crimes and invent new ones.
Burglary is when a criminal steals something without a confrontation with the owner, for example breaking into your house when you’re away and taking your valuables. A great deal of cyber-crime has been burglary, things like hacking your computer system and stealing data. But then how do you sell the data? More important, how will you collect your money from the criminals who buy it?
Enter Bitcoin. The buyer can be anywhere in the world. They can be of any nationality, used to using any currency. Once an agreement has been made, payment is simple, fast and untraceable. The buyer and seller don’t need any direct contact. Any currency can be converted to Bitcoin to send, and converted to any currency on receipt. Or left in Bitcoin to use in other criminal enterprises. Bitcoin hasn’t transformed the huge field of criminal data, but it sure has greased the wheels.
Robbery is worse than burglary. It’s when a criminal confronts you on the street, points a gun at you and says something like “your wallet and jewels or your life.” Most people do what the robber says and hope to live another day. The new wave of cybercrime is robbery a.k.a ransomware: not just sneaking into your computer but encrypting everything and “tying your computer up” until you pay the ransom.
Ransom attacks on computers have always existed, but they were fairly rare, because there was no way the robber could collect the victim’s money without revealing himself. Then Bitcoin came along. Bitcoin enables anyone to buy it from an exchange like Coinbase and then send it to the criminal’s anonymous Bitcoin address. The criminal, who could be anywhere, then has your money and may, if he feels like it, release your computers from their electronic shackles.
There wasn't much ransomware a decade ago. Then came Bitcoin.
“eCrime – a broad category of malicious activity that includes all types of cybercrime attacks, including malware, banking trojans, ransomware, mineware (cryptojacking) and crimeware – seized the monetization opportunity that Bitcoin created. This resulted in a substantial proliferation of ransomware beginning in 2012...
Bitcoin exchanges provided adversaries the means of receiving instant payments while maintaining anonymity, all transacted outside the strictures of traditional financial institutions.”
Then came a new generation of locking technology, 2048 bit private key. This led to a shift away from spraying malware to millions of little computers to infecting, locking and ransoming big institutions, Big Game Hunting.
The criminals evolve quickly. They are generations ahead of the largely inept bureaucrats with huge budgets following security regulations that are typically obsolete by the time they are issued.
As a result, ransomware attacks were everywhere in 2021 and continue growing.
Double-extortion ransomware attacks rise: On average, a new organization becomes a victim of ransomware every 10 seconds worldwide.
Here is more and a recent example.
From suitcases of cash to Venmo for Criminals
Illegal national and international weapons trafficking has always existed. So has human trafficking. Likewise importing and selling addictive drugs like heroin. These are all human horrors.
For some strange reason, the people who import and sell innocent young girls want to be paid in cash. Lots of it. Same thing with fentanyl. It’s inconvenient and dangerous, carrying around huge stacks of hundred dollar bills! Bitcoin changes the game. Bitcoin is like Venmo for the criminal class. No records. No annoying banking regulations and reports sent by banks to snoopy government agencies. Computer-to-computer transfer. Yes there’s a record that a transfer of Bitcoin took place – but ZERO record of from whom or to whom.
Cryptocurrencies are widely discussed. "Bitcoin Billionaires" are in the news; hosts of ordinary people hope to be like them. The crypto industry sponsors reports and generally promotes the idea that the criminal use of crypto is minimal and going down. As we know from the explosion of ransomware attacks and other things, this is not true.
The talk about having a government version of crypto, a CBDC, should be stopped. Bitcoin mining should be outlawed, as several countries have already done. It should be illegal for any regulated exchange to enable sending to or receiving from any address that fails to have full KYC and other identity disclosure with it. There are lots of exchanges that operate internationally for the criminals to continue using, as they will.
Cryptocurrencies are an amazing technical achievement. Unfortunately, they make the world a worse place. Computers and networking already provide rich ground for criminal activity; Bitcoin added a safe-for-criminals international payment method that has fueled an explosion of computer-based crime.