- A Europol report says cryptocurrencies are still exploited for a number of crimes.
- While legitimate crypto activity has increased faster than illegitimate crypto activity, crimes are still commonplace.
- Sextortion, theft and more sophisticated dark web interactions all make use of crypto.
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A Europol report on internet organized crime, published yesterday, claims that cryptocurrencies are playing an important role in cybercrime.
The use of cryptocurrencies in facilitating crime has been long established. As early as 2011, the infamous Silk Road darknet web laid bare how criminals were using crypto to deal in illegal drugs, with other darknet markets specializing in weapons, identity theft and child exploitation. Eleven years on from the birth of the crypto industry, Europol’s report suggests lessons have still to be learned.
“Reliability, irreversibility of transactions and a perceived degree of anonymity have made cryptocurrencies the default payment method for victim-to-criminal payments in ransomware and other extortion crimes, as well as criminal-to-criminal payments on the Darkweb,” the report said.
However, it’s worth noting that legitimate crypto activity seems to have grown faster than illegitimate activity since the Silk Road days. In 2019, most Bitcoin transactions were linked to investment and trading, resulting in criminal activity only taking up 1.1% of the total transaction pie.
That may sound small, but the crimes remain significant. Extortion activities, greater darknet sophistication and theft all feature in the report’s findings.
Extortion scams have been found to typically involve sextortion. “According to a recent study analyzing a subset of 4 million intercepted sextortion emails, over 12,500 Bitcoin addresses were extracted, 245 of which received one or more payments,” the report said.
On the darknet, privacy-enhanced cryptocurrencies have become a tool of choice for criminals. Wasabi and Samurai were both mentioned in the report as tools for anonymously swapping cryptocurrencies. This fits the report’s broader narrative about the darknet, where site administrators are adapting in the search for better security solutions to interact with each other.
Theft has become more prominent in recent years, and the report suggests this is due to the rapid growth of the cryptocurrency industry in general. “The growing adoption of cryptocurrencies increases the number of vulnerable victims, so it is no surprise that thefts from individual and enterprise wallets have become more prominent over the last few years,” the report said.
In 2019 alone, 10 confirmed hacks of crypto exchanges have resulted in over €240 million ($283 million) worth of assets being stolen, but these figures peaked in 2018, when an unprecedented €950 million ($1,120 million) was stolen, about €500 million ($589 million) of which came from Japanese exchange Coincheck.
And unless such lessons are learned, these hacks will continue to happen.