In 2009 Satoshi Nakamoto invented Bitcoin, a counterfeit-proof technology with no central governing body. Since then several cryptocurrencies have emerged that are based on Satoshi's technology. Cryptocurrencies can be traded for other cryptocurrencies or used as payment for goods and services.

Bitcoin is a digital currency that has no central body, that is a central bank or a government that dictates the policies surrounding it.

Bitcoin has shown not only the potential to be a modern system of payment at its current state it has surpassed all expectations. In addition to all the perks of using this decentralized technology and the threats of cybercrime to the ill informed and the trafficking of illegal substances. They are hundreds of cryptocurrencies available and all of them are similar to the first known crypto to exist.

Bitcoin started a decentralized network of users that where currencies are not simply given to the network of users but are mined with specific computers ( Application-Specific Integrated Circuits). These computers solve complex mathematical equations.

There are close to 200 cryptocurrencies and this is all because of the success of Bitcoin. These coins are known as altcoins which all have different uses but are all alternatives to the first cryptocurrency to exist. Mining altcoins is easier but usually, the risk of less liquidity remains a present threat to these alternative coins on the market. Examples of altcoins that are note-worthy are Etherium, Tether, Binance, Cardano, and ripples.

In this post, I'm going to explore with you some of the features that make cryptocurrencies in addition to all their utility, tools for cybercrime.

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CYBERCRIME INVOLVEMENT

Because of the internal security problems countries have against Bitcoin and the involvement with black market sales, bitcoin is usually associated with cybercrime. The system provides anonymous transactions and the standing with legal bodies makes it a perfect fit for illegal money transactions.

The cybercrime potential of the blockchain sphere was brought to the limelight in 2014 when a Tokyo-based currency exchanger Mt. Gox got hacked and nearly $500 million was stolen and it was declared bankrupt. In March of that same year Flex coin, a Canadian Bitcoin storage company closed down due to the theft of over $650,000 worth of Bitcoin.

Bitfinex in 2016, A Hong Kong Bitcoin exchange lost about 120,000 Bitcoins which was estimated to be about $72 million and in two days the value of BItcoin dropped by 20% from $603 to $480.

In recent times, these issues continue to plague the system.

Last Year

In February , Helix Bitcoin was reported to have been run by a man in Ohio who stole close to $300 million.

In April, $25 million was stolen from Lendf.

June came with New Zealand's freezing of 90 million in BTC-e assets during an investigation for money laundering. Also, CryptoCore was reported to have stolen over $200 million over exchanges.

July had the CEO of VaultAge Solution hiding $13 million of investor's money.

In September nearly $150 million was stolen from wallets with big holdings.

October, Harvest Finance was hacked and lost $24 million.

The United States and Brazil seized 24 million in crypto from Operation Eygpto due to its involvement in online investor fraud in November.

In December Compound Finance allegedly swindled millions off its investors.

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EXAMPLES OF CYBERCRIME

HACKING

Among the different types of cybercrime, hacking appears to be the most popular. Its origin is linked to the ability to have access to a computer to test risk or threat. It refers to the active process of having unauthorized access to information technology systems to take the information, tamper with it or tamper with the software or hardware of a device

Canadian Flexcoin, a wallet company in 2014 lost $500,000 worth of Bitcoin from cyber-attacks
Kenyan Bank NIC was exposed to a ransom-type scam. The hackers claimed they would release confidential information if the ransom was not paid. 200 Bitcoin was lost.
Bitcoin exchange, Bitstamp was subjected to cyberattacks that led to 19,000 Bitcoins being stolen. It was valued at $500 million.

PHISHING

In phishing individuals or organizations are deceived by social engineering techniques to think that they are communicating with legal businesses such as a bank. This is mostly done via e-mail. The 'phisher' gets the individual or organization to provide vital information.

A spoofed website is created sometimes for phishing. A spoofed website is a fake website that is designed to mislead people or organizations. They usually imitate websites that are known to be legitimate.

Victims from Ukraine lost over $50 million from phishing in 2015. A spoofed website was made to mimic a known Ukraine online wallet. The phishers used the same name as the online wallet but changed the spelling in a subtle way.

Atlanta-based bitcoin payment processor company, BitPay, was the victim of a phishing attack, which resulted in losses amounting to US$1.8 million.

BitPay which is based in Atlanta fell victim to phishing and lost $1.8 million. The phisher used Identity theft, stealing the identity of the Chief Financial Officer, and requested for 5,000 Bitcoin be to transferred to a SecondMarket twice. So, a total of $1000 Bitcoin was transferred.

Other Examples not discussed here but are also important are Malware, cyberextortion and ransomware, cryptolocker, Ponzi schemes, and the likes.

CONCLUSION

This post has explained in some way how cryptocurrencies can be used as a tool for cybercrime.

cryptocurrencies are international online currencies that can be used in many ways to facilitate cybercrime. Because cryptocurrencies have facilitated easy payment across countries, they also present a threat to those who are ill-informed or who have not taken proper precautionary measures. In my next post, I will discuss the other types of Cyberattacks and Cybersecurity.

CRYPTOCURRENCIES AND CYBERCRIME