9 Cybercrimes (Involving Cryptocurrency) Affecting Law Enforcement Professionals

Before we share 9 Cybercrimes involving Cryptocurrency, we want to emphasize that the majority of Cryptocurrency usage is not malicious. Similar to electricity or the Internet, these forces can be used for good or well, bad too. We seek to inform all interested parties through this writing about some new forms of crime taking root.

Cybercrime is a double edged sword, on the one hand with IP addresses and mass surveillance through titans like Facebook or Google, things can be easy to track. On the other hand, they can be nearly impossible to track with the emergence of more robust privacy technology and diligent security practices.

Would be attackers can emerge from just about any corner of the earth with an internet connection and the gumption to cause trouble. We must remain vigilant and aware of lurking threats and attackers.

Picture of hacker created by Freepik

Now on to the top 9 Cybercrimes involving Cryptocurrency:

  1. Bomb Threats – Sadly this threat which has been around for decades has evolved into something even more sinister with the emergence of requesting Bitcoin as a ransom. In the second week of December, scammers sent out bomb threats worldwide demanding Bitcoin in exchange for not detonating a supposed bomb. All threats were sent via email to places like schools and businesses.
  2. Malware/Ransomware – You might have heard of stuff like Cryptolocker or WannaCry which would end up on unsuspecting users computers and lock up their files until they pay a ransom (again, in Bitcoin). Often users report their files still being corrupted after paying the ransom while others get their files back in tact. Malware is delivered through malicious links, files and even advertising (Malvertising). Malware can range in outcomes from ransom demands, to outright theft of coins and even secret mining on users CPUs.
  3. Human Trafficking/Smuggling – As with any crime, a financial nexus is almost always at the core of illicit activity. Some have begun to accept Bitcoin for things like escort services. However, full fledged human traffickers may also look to Cryptocurrency as a vehicle to support these activities.
  4. Hacking – This can manifest in a variety of ways such as data being inaccessible, destroyed or funds being stolen through theft of credentials to exchanges or wallets. Hacking is like a digital trespassing occurrence and can yield a range of negative externalities from nothing at all to personal data (like passwords, credit card #s) siphoning or Crypto private keys (and the funds they access) being taken.
  5. Scams – Cryptocurrency allows funds to be moved around anywhere easily by anyone. This has allowed Ponzi schemes, HYIPs and other illegitimate programs that promise monumental “too good to be true” returns. This process occurs through fake sites which allow funds to be deposited into a platform that sometimes will even pay out to users temporarily to create a false sense of confidence around the platforms legitimacy. The usually outcome is the platform packs up shop and leaves with everyone’s money (See: Bitconnect).
  6. Money Laundering – The majority of Cryptocurrency users use Crypto for legitimate purposes like investing, trading, purchasing goods, donating and a myriad of financial services among other applications. Yet, despite this, there is a contingent that will certainly attempt to use this new tech for bad stuff (such as laundering blood money). Some might try to purchase the minimum amount at ATMs (just under the requirements to provide an ID). Others try to source other Peer 2 Peer (P2P) services or Exchanges to buy and sell their coins.
  7. Illicit Drug Trade – You may have heard about the saga of Silk Road and the fall of Dread Pirate Roberts (being charged to Ross Ulbricht) in what has become one of the most controversial drug cases in recent decades. Silk Road was an Amazon of illegal drugs and Bitcoin was the currency of choice for this “dark net” marketplace. However, as time went on, the FBI wisened up to these sites and have cracked down which culminated in the seizure of The Silk Road.
  8. Sim Jacking – The heist could be as simple as sim swapping which is where the attacker steals users sim cards and takes their account over. This typically ends with outright theft of users Cryptocurrency. Arrests have been made for people doing that and it is a top priority for many Law Enforcement divisions.
  9. Phishing – This is where a website or fake link which is malicious and asks for your password or private key which allow them to take all of your coins through those credentials. They would log into your wallet and drain your funds and send them to another account they have control over.

While the delivery mechanisms and methods of moving around money are changing, the core crime and injury to the parties is the same. They used to have their data, money, private keys (to access their Crypto) and now they don’t (due to cyber thieves).

Or, users aim to move and wash money obtained from illicit activities through new vehicles (like Bitcoin ATMs). While Cryptocurrency might be new, the desire to launder money or steal from people is not.

[Call to Action – Want to learn more, check out our free webinar where Chris Groshong, CFI, founder CoinStructive and Joe Ciccolo, founder of BitAML]


Further Reading

The Past and Present of Bitcoin Mining Fraud, HYIPs and Ponzis

California Cybercrime Police Focus on Cryptocurrency SIM Swapping as Highest Priority

U.S. Indicts Iranians Over $6 Million Cryptocurrency Cyber-crimes

Coinhive Keeps Mining Cryptocurrency via Unsuspecting Organizations

The Rise and Fall of Silk Road Part 1

McAfee Labs Threats Report 2018

New Study Highlights Cryptocurrency’s Role in Cybercrime

The Digital Economy: Potential, Perils, and Promises [A Report by the Digital Economy Task Force by Thompson Reuters and The International Centre for Missing and Exploited Children (ICMEC)]

The National Cybersecurity and Communications Integration Center (NCCIC) [Part of Department of Homeland Security, DHS]