With every passing day, the need for efficient cyber-security systems is on the rise. While cybersecurity systems are getting smarter, hackers and cyber-criminals too are getting sharper! Cryptocurrencies becoming mainstream has had a major impact on cybercrime. The private and anonymous nature of these transactions has opened a new avenue for these cybercriminals to disappear with your money, leaving no trace.
Here’s what lures these cyber-criminals towards cryptocurrencies:
A large number of cryptocurrencies are high on privacy and anonymity. Even if you can view the wallet to which the money has gone, you will never be able to figure out who it belongs to. These cryptocurrencies can then be transferred via cryptocurrency exchanges and practically be made to ‘disappear’ into a network. This highly private nature of some cryptocurrencies have earned them the ire of various governments across the world.
How Cryptocurrencies Are Helping The Growth of Cyber-Crime:
Currencies such as Monero and Verge – which are privacy-focused offerings, have become favourites of criminal activities on the dark web. But more on that later. Let us take a look at the various types of cyber-crime activities which have risen due to the rise of cryptocurrencies:
Ransomware attacks are basically a kind of a malware attack which encrypt all the files in your computer. A key is needed to decrypt the files which is provided only after a certain amount of ‘ransom’ is paid to the attacker. This ‘ransom’ is in the form of cryptocurrencies. With cryptocurrency payments, these attackers get impossible to track down and can possibly attack anyone in the world with ease.
The spread of ransomware has been rather alarming. 2017 was the biggest year for malware attacks when some organizations came to an absolute standstill. It hit a new low when hospitals were targeted by these hackers. The attack encrypted medical records of patients – causing a major disarray which could have potentially led to even loss of life.
Cryptojacking attacks peaked in 2017 and many major websites such as leading Indian newspapers and popular Chrome extensions, as well as ads on YouTube , were infected with cryptojacking scripts! The infamous coinhive script makes these activities even easier.
- Ponzi Schemes
With cryptocurrencies proving to be an easy avenue for many investors to make quick money and get hefty returns on their investments, Ponzi schemes are on the rise. A number of ‘get rich quick’ sort of schemes have been making their way into the markets. Ponzi schemes and pyramid schemes such as those which offer guaranteed returns on investments are created by cyber-conmen to trick people and part them from their money.
The likes of BitConnect, OneCash, DavorCoin, OneCoin – are among many others which have been served cease and desist notices from governments across the world. These schemes are a pyramid scheme which lure the users by saying that if they invest $1000 in the platform, it would offer them a return of $10,000 in a month or so. These outlandish claims attract many novice and uninformed investors who lose all their money in these Ponzi frauds.
- Exchange Hacks
Cryptocurrency exchanges too, have become a victim of attacks from cyber criminals. Attacks on cryptocurrency exchanges are not new – From the Mt. Gox attack to the more recent Coincheck attack – Billions of dollars worth of cryptocurrencies have been stolen by attackers by hacking cryptocurrency exchanges.
Some exchanges such as BitGrail crack under pressure and end up losing the money, and have to declare insolvency. Others such as Binance fight back and are able to defend their funds successfully. Governments are instructing cryptocurrency exchanges to upgrade their security system as per standards set by them.
- Drug and Weapon Trade
The dark-web is a part of the internet which has gained a mythical status over the years. Almost every trading platform on the dark-web accepts cryptocurrency payments. These websites are involved in everything from drug and weapon trade to even the sale of endangered animals and human organs. Cryptocurrencies have become the favourite means of payment on the dark-web because it allows the traders as well as the buyers to remain highly anonymous. Many governments have expressed their concern that cryptocurrencies are funding the drug trade or sponsoring terror activities.
- ICO Frauds
Initial Coin Offerings are a new and easy way of raising funds instead of a traditional IPO. ICOs attract more investors as investors don’t even need to be accredited in order to invest in ICOs. However, a large number of ICOs are actually starting off just to raise funds. Once they have the funds, the developers shut down the project and abscond with the cryptocurrencies that they’ve raised. Hence, many nations such as South Korea have banned ICOs while many are planning to regulate them. Ethereum co-founder Vitalik Buterin has proposed DAICOs – a new kind of ICO system which would give some power in the hands of the investors as well.
Lastly, every new technology out there is destined to suffer through the increasing pains of its way to being accepted by mainstream, there’s no reason cryptocurrencies will be any different. But to avoid these scams, people must try to gain as much knowledge about it as possible using a website like CryptoGround where you can find the complete Crypto guide. Moreover, keeping yourself updated of the latest going ons can also help.
Author Bio: Prince Kapoor is Marketing Analyst Lead at LoginRadius, A leading CIAM Provider. While not working, you can find him in gym or giving random health advises to his colleagues which no one agrees on :D. If you too want some of his advises (on health or on marketing), reach him out at Twitter.