Cybercriminals are engaging in cryptocurrency mining, hacking of cryptocurrency exchanges, and selling stolen assets on the Dark net to make money. On 17 February, the US Justice Department announced that it was launching a National Cryptocurrency Enforcement Team designed to monitor blockchains.
Cryptocurrency and bitcoin, in particular, are the favored means of monetizing crimes especially the ever-increasing scourge of ransomware which locks people out of their computers and demands payment to get access again.
The reasons why crime in cryptocurrency is growing to a massive extent have been forecasted by legal and cybersecurity analysts. Experts are listing this as a growing trend because of the current situation prevailing in the cryptocurrency market. These cyber crimes include exchanges being robbed, private keys being stolen and digital wallets being hacked.
Money Laundering and Cryptocurrencies
According to cryptocurrency experts, money laundering is one of the most common and powerful money-laundering tools to take advantage of cryptocurrency. This basically means that criminals take advantage of bitcoin’s unique features in order to anonymously transfer money through a network of interconnected account holders. These accounts do not have to be identified, as their owners are the only ones who are supposed to know which account belongs to them.
Furthermore, there are no countries that have officially outlawed the use of bitcoin. However, as part of a regulatory crackdown, India will be the first country to make it illegal for its citizens to own, purchase, or sell bitcoin. This has made some speculators a little nervous, although they have not shown much concern about its implications in India.
There has been some uncertainty in the US, however, because if America were to crack down on the use of bitcoin, this could discourage investors from investing in other cryptocurrencies, such as Ethereum and Ripple.
In this context, we argue that, given that bitcoin operates without any formal regulation or supervision, there is no entity in the world that can regulate its volume and the global network of accounts.
The NFT Market and Stolen Art
According to a recent report, the digital market for NFTs is estimated to have grown to $22 billion last year, but companies have difficulty monitoring stolen art. The problem could become worse as the market continues to grow. These crimes are “rapidly increasing” in the U.S., affecting more than 6 million people, more than twice the previous year’s number.
Digital artists were supposed to benefit from blockchain technology by selling unique tokens of ownership, which would provide buyers with records of ownership. But despite ample hype in its early days, the technology hasn’t lived up to expectations. The technology is still technically in its early days, with issues around how well consumers can verify ownership, and it’s also become easier for people to figure out how to buy tokens of ownership without going through a complicated legal process.
In fact, blockchain technology hasn’t been much help for artists who want to get paid. About 90% of artists didn’t think their work was part of a blockchain project. And artists don’t like the technology, either. For one, they worry it will diminish their value, since people can now easily do things with tokens of ownership that they could not do with cash. For another, they say, it’s too complex for most people to use.
But a handful of companies are working on different ways to use blockchain to simplify transactions for artists.
Scams Running via Cryptocurrency Exchanges
These Exchanges are legitimate businesses, however, people often fall victim to cryptocurrency scams and other crimes in a plethora of different ways. A recent study of 29 unregulated cryptocurrency exchanges found that over 70 percent of the trading was "wash trading." (when an investor sells and buys the same asset, creating an artificial interest).
The number of crimes reported has witnessed a rise of an alarming 1000 percent, in recent times, more significantly throughout 2020 and 2021. Furthermore, a couple in the U.S. was charged with laundering over $4.5 billion worth of bitcoins. These crimes come at a hefty price of millions of dollars in losses, and several cases involving cryptocurrency theft are ongoing at various law enforcement agencies across the globe.
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