Is Cryptocurrency Just a New Frontier for Criminals?
Across the world, the issue of cybersecurity has plagued many different industries across the board. Certain softwares can take over computers and not only steal data, but hold it for ransom. This can be aimed at governments, companies or even hospitals just to name a few. Although some can get their data back on their own, most who are hit by what is called ransomware are forced to pay up.
During the year of 2016, the FBI estimated that the industry based on ransomware stole over $1 billion. This is only coming from data that officials know about.
The hard part about getting ransoms is how to remain anonymous but still get the money. This is where cryptocurrency comes in. The money cannot be paid in cash because the likelihood of it getting traced is extremely high, so those who hold computers for ransom typically ask for payment in bitcoin. This is due to its high level of anonymity and ease of use.
Since the beginning of cyber crime, the hardest part has been obtaining the actual currency, but now that bitcoin has come into the market place along with a myriad of other currencies, it is easy to get paid.
In one attack by hackers known as the Wannacry attackers, they asked for between $300-$600 per computer. Since most people didn’t actually pay, the group only walked away with around $241,000 in bitcoin. If all who were involved had paid, those who ran the attack would have been given over $60 million. With other attacks being more successful, it seems as though the payout rate remains low in the scheme of cyber security.
With the popularity of bitcoin increasing substantially, and the use of cryptocurrencies on the rise, it is no wonder that criminals are attracted to it. The hopes are that this will not lead to a delegitimization of what could become the next currency for the world to use.
Switzerland Cracks Down on Cryptocurrency Related Crime
A group in Switzerland has recently found and subsequently shut down producers of a “fake” cryptocurrency titled E-Coin.
The regularity nature of this act comes in the wake of China’s attempts to shut down bitcoin as well as other forms of cryptocurrency. This has caused mass frustration in the cryptocurrency world as the main premise of using it is anonymity.
According to data from the country’s Financial Market Supervisory Authority or FINMA, around $4.2 million was paid to the developers of the fake cryptocurrency who didn’t have any license to conduct this type of transaction.
One spokesman for FINMA stated that “generally, regarding Swiss regulation int he area of fintech/cryptocurrency, I can state that FINMA as supervisory authority applies the currently applicable financial market regulation and intervenes if regulations are breached.”
The organization in the country titled QUID PRO QUO was the one accused of creating the false currency while working with two other companies known as DIGITAL TRADING AG and Marcelo Group AG.
So what does it mean when someone says that it is not actual cryptocurrency? Since coins like the popular ones of bitcoin and Ethereum are all stored on types of distributed ledgers known as blockchains, the tokens they created were only stored on local servers, thus the companies ability to have complete control.
The company told investors that their investments would be backed up to 80% by the companies assets which did not actually exist.
The watchdog who found the company out stated that “moreover, substantial tranches of E-Coins were issued without sufficient asset backing, leading to a progressive dilution of the E-Coin system to the detriment of investors.”
FINMA has been quoted as saying that they are investigating eleven other possible activities that could be similar to this one.
The hopes are that these distinct acts of criminalization will not affect the reputation of what could become the currency of the future, but only time will tell.