The not-so-good: cryptocurrencies also create
a veil of anonymity that creates many problems, particularly concerning
cybercrime. Cryptojacking might seem like a harmless crime, since the only
thing ‘stolen’ is the power of the victim’s computer. But the use of computing
power for this criminal purpose is done without the knowledge or consent of the
victim, for the benefit of the criminal who is illicitly creating currency. As
a large number of infected devices generates a huge amount of cryptocurrency,
cybercriminal see this as a lucrative crime.
They can attack any business and ask for
ransom in digital currencies as this form of cybercrime is untraceable, and no
evidence leads back to the perpetrators. With cryptocurrencies spreading across
the business world, cybercrime has become a real threat. Cryptojacking is a
type of cybercrime where a criminal secretly uses a victim’s computing power to
generate cryptocurrency.
The increasingly egregious role of cryptocurrencies
in cybercrime has prompted several official authorities to call for global
crypto regulation and restrict their use. Cybercriminals can unknowingly use
your computer to generate cryptocurrency Over the past decade, other fully
anonymous cryptocurrencies have also started to emerge. Unfortunately, these
developments are likely to lead to a surge in cybercrimes.
While cryptocurrency might be the dawn of a
new age, it also has its counterpart that’s not so popular – cybercrime. It
comes in many forms, from ransomware to email scams. The truth is,
cybercriminals love laundering money and scheming businesses using
cryptocurrency scams. The Federal Trade Commission (FTC) states that one of the
biggest signs of a cyber scam is when a cybercriminal asks an individual or
company to pay by cryptocurrency. Whenever there's a request to pay by gift
card, wire transfer or cryptocurrency, it's a major red flag that you're about
to fall victim to a cyber attack. Once the scammer is paid in one of those
ways, it becomes nearly impossible to recover the money. Cryptocurrency can be
mysterious, complicated and confusing to many people, and as it continues to
grow in popularity, so does the opportunity for crypto scams. The FTC reports
that between October 2020 and May 2021, Americans lost over $80 million to
cyberattacks on cryptocurrency.
The decentralization of cryptocurrency is an excellent opportunity for cybercriminals. Cybercriminals can hack into cryptocurrency trading platforms and steal funds. Cryptocurrency is already the most preferred form of exchange in cases of ransomware attacks.
The
rise in popularity of cryptocurrencies like bitcoin has led to new
cybersecurity issues, such as the recent ransomware attack on the Colonial
Pipeline. This article looks at some common cryptocurrency scams and why
businesses should ensure they have a cyber insurance policy to stay protected
from these and other cyber attacks.
Cryptocurrency is a digital or virtual asset designed to work as a
medium of exchange that uses cryptography to secure its transactions and to
control the creation of new units. Cryptocurrency is decentralized, meaning it
is not subject to government or financial institution control. Cybercrime is a
type of crime that involves the use of computers and telecommunications to
commit crimes such as fraud, identity theft, and theft of intellectual
property. Many crimes involving cryptocurrencies are motivated by the desire to
gain financial benefits.
Cryptocurrency or crypto-asset is understood
as a “decentralized, distributed, convertible virtual currency, mathematically
based on a complex algorithm and that uses a cryptographic system to ensure the
integrity of the transactions of the system on which it is based. As a general
rule, there is no control system, central bank, or centralized storage, since
it uses decentralized, shared, and synchronized networks” (Hancock and Vaizey
2016). The functioning of cryptocurrencies is based on a system of public and
private keys that serve to carry out transactions reliably and securely, and
each transaction must be signed cryptographically (Marrero Travieso 2003).
Security is guaranteed and most of them make use of blockchain technology.
Cryptocurrencies allow users to transfer value directly from one to another
without having to resort to an external intermediary, thus bypassing the
banking system (Palomo-Zurdo 2018). Blockchain is the basis or support for
cryptocurrencies, and especially for Bitcoin; Its concept refers to a database
in which each user, with each transaction he/she executes, issues information
that is aggregated in data blocks (Corredor Higuera and Guzmán 2018; Parrondo
2018). Unlike the banking system, in which there are intermediaries, with
blockchain, which replaces traditional financial institutions, we are faced
with a secure, transparent, and decentralized system, in which there are no
intermediaries or supervisors (Parrondo 2018). The blockchain is a system that
verifies and records the operations of a cryptocurrency, decentralizing the
entire management. One could say that it is a digital ledger, which ensures the
integrity of its contents (Argañaraz et al. 2019).
A cryptocurrency is an electronic form of a
digital asset or money that operates as a medium of exchange. It’s a form of
electronic payment that uses cryptography to provide additional security when
making transactions. A cryptocurrency is a tradable digital asset or digital
form of money, built on blockchain technology that only exists online.
Cryptocurrencies use encryption to authenticate and protect transactions, hence
their name. There are currently over a thousand different cryptocurrencies in
the world.
Cryptocurrency is defined as a type of
unregulated digital money which is issued and usually controlled by its
developers, and used and accepted among the members of a specific virtual
community. According to CoinMarketCap website, Footnote 1 accessed in February
2021, nowadays there exist more than 3,207 different types of cryptocurrencies
with market capitalization. Bitcoin and Ethereum are at the top of the market
capitalization list.
Cryptocurrency is a peer-to-peer version of
electronic cash, implemented though digital signatures, that allows online
payments to be sent directly from one party to another without a financial
institution. Today, cryptocurrencies are largely accepted because they allow
members of society who could not open a regular bank account to participate in
financial transactions via an internet-based altcoin account operable from any
smartphone.
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(All the material in this article are only the views of the author, and couldn’t be taken as “Financial Advice”)
The role of cryptocurrency in cybercrime,
Crypto ransomware examples
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