On one side of the argument, cryptocurrency stands for a completely independent network that provides peer-to-peer transactions, while allowing for total transparency and permanency across a distributed ledger. In other words, every transaction made on a blockchain is evident in a universal ledger for everyone to see. It includes an identifiable account number, time of the transaction, and the conversion rate.
For the critics, it serves as the proprietary vehicle for money laundering and will never reach the status of becoming a legitimate, international currency. The allegations for using Tether for Bitcoin pricing manipulation also serves as a foundation for the criticism against crypto.
Crypto Mining Malware
In the arrival of revolutionary technology comes revolutionary problems. In recent years leading up to the crypto buying frenzy, the number one cyber attack was in the form of Ransomware. Ransomware is a type of malicious software that aims to encrypt the users data and files until a ransom in paid. A report from Skybox Security confirmed the assumption in that ransomware was on a massive decline after people refused to pay to decrypt their files, on rumors that files were never decrypted anyway.
Amid the hefty price increases to cryptocurrency in the latter half of 2017, “crypto jacking” became the next big thing among cyber criminals. Hidden code on a variety of poorly managed cryptocurrency sites accompany malicious software that target the central processing unit of a computer to mine cryptocurrency. You would never know that your CPU was being used unless you glanced at your task manager. This allows crypto-jacking criminals to fly under the radar in their cash cow of a safe haven. Malicious crypto mining in up to 32% of all cyberattacks in the first half of 2018, compared to 8% in all of 2017 per Coindesk.
Money Laundering Made Easy
Thomas Mario Costanzo, a United States resident of Arizona was arrested on five charges of money laundering. Last year, federal agents raided his home in search of a massive supply of ammunition and money laundering through a peer-to-peer bitcoin exchange he created. Constanzo was convicted this past March on the allegation of laundering 80 bitcoins; worth around $164,700 at the time.
Someone should have told Mario about Monero.
Monero, the cryptocurrency notorious for its excessive anonymity, proves that it’s the ideal vehicle for money laundering. The unique coin distinguishes itself from the others in that the coin does not identify an account number associated with its transaction in the ledger.
Law enforcement has completed money laundering with cryptocurrency by tracking the account number in a transaction to an I.P address, which can give away the user or owner of the computer. With Monero there is not an account number that can be tracked. CypherTrace, a cyber-security firm, reported that the demand for Monero has grown 300% in 2018, measured by the stolen amount of coins from exchanges. In 2017 alone, about $250 million worth of Monero were stolen from exchanges. The year to date amount for stolen capital in the first two quarters of 2018—$750 million.
What do you think about crypto and crime? Let us know in the comments below!
Featured Image: Depositphotos/ boydz1980