Did you know that cryptocurrency can be used to commit crimes?
Many illicit and unlawful activities, including the following, are made financially possible by the use of cryptocurrencies:
- Money laundering
- drug distribution
- human exploitation
- child exploitation
- Dark websites market trading
- terror funding
Before diving further, What exactly is cryptocurrency?
A cryptocurrency is a form of digital cash that may be used in payments and other financial dealings. The most well-known cryptocurrency, Bitcoin, was released in 2009. There are currently more than 4,400 cryptocurrencies on the market. Despite this, Bitcoin continues to command a market share of around five times greater than its closest rival.
Digital wallets are used to store and transact with cryptocurrencies online. Exchange or other financial services that manage bitcoin payments, purchases, and sales can host digital wallets. Digital wallets can also be unhosted, allowing the owner to transfer money using cryptocurrencies from one wallet to another. Unhosted transactions are largely anonymous and don’t involve any banks or other financial mediators.
DIVING INTO THE ILLICIT ACTIVITIES
Why do these criminals use cryptocurrency as their tool for their crimes?
Scams vs. thefts
Criminals can acquire cryptocurrency in one of two ways: directly through theft or by the deception of victims.
One example of this situation is Chainalysis-
According to Chainalysis, a record amount of cryptocurrency worth US$3.2 billion (A$4.48 billion) was directly stolen by cybercriminals in 2021. From 2020, the growth will be five times greater. Schemes, however, still outweigh pure theft, allowing con artists to defraud people out of US$7.8 billion (A$10.95 billion) in bitcoin.
The names of transaction creators still need to be discovered, despite the fact that all transactions made on the blockchain are preserved on the public record and available for scrutiny by anybody.
The following scam types, where the perpetrator is not the target’s acquaintance, are frequently seen in the cryptocurrency area, according to the ACCC’s most recent edition of the Little Black Book of Scams:
Phishing in emails
The fraudster sends unsolicited emails requesting personal login information. Then, instead of a deposit, they could provide “prizes” or “rewards.”
The con artist makes a fake investment trading platform website. It might be a fake version of an actual company or a totally fake one. They might even publish counterfeit adverts on social media sites that have fabricated endorsements from famous people.
To follow illegal transactions and identify the parties involved, government security groups are devoting their resources to crypto criminal investigations. However, doing so is a highly challenging and complicated task, which is why criminals and terrorists prefer cryptocurrency.
Concisely, Crypto crime is a rapidly expanding industry. In the context of cryptocurrency crime, there are real-world legal issues. While reporting fraud can help give regulators and law enforcement information, it is unlikely to result in the recovery of money.
As the saying says, “Prevention is always better than cure.”
The primary way to avoid scams is to make certain about who you’re dealing with. Make transaction deals with credible channels and reputable exchanges. Always make sure that these channels are verified.