There are many benefits to cryptocurrencies — they’re designed to be safe for users and are difficult for outsiders to manipulate. Because cryptocurrency is not bound by exchange rates, interest rates, and transactions charges, this provides an incentive for the average person to consider investing in some form of cryptocurrency. With over 1,000 cryptocurrencies in existence, it is clear that cryptocurrency is here to stay. Today we look at some of the major reasons why cybercriminals may be more partial to cryptocurrencies to commit their cybercrimes.
1. Cryptocurrencies allow for faster transfers and transactions.
Most people use mobile banking services to manage their transactions and send money to different accounts. However, sometimes these banks impose a waiting period on funds from incoming (and especially international) wire transfers, which can inconvenience the customer. On the other hand, with cryptocurrency, money transfers can be deposited into the receiving account instantly. Additionally, there is no need for users to deal with currency exchange. The speedy nature of transactions, without the complications of dealing with currency exchanges, makes cryptocurrency an attractive alternative for cybercriminals to send and receive funds from each other and especially from victims of their cyber scams or attacks
2. Transactions using cryptocurrencies are irreversible.
Unlike typical electronic funds or wire transfer services, transactions issued with cryptocurrency cannot be reversed. Typically, customers can be only be refunded by the person receiving the funds. For this reason, extra precaution is necessary, and customers are encouraged to perform cryptocurrency-issued transactions only with people and organizations they know and trust. Unlike bank customers who might find it easier to get their money back from their bank service after being duped into transferring money to a cybercriminal, victims of a ransomware attack that demand payment in cryptocurrency, for example, will never be able to retrieve their funds since there is no central authority to help mitigate fraud involving cryptocurrency. This decentralization is one reason why cybercriminals can take advantage of the system.
3. Cryptocurrency accounts can be used to conceal real-life identities.
Anyone can create an account (called a “wallet”) to receive and send cryptocurrency in a matter of minutes without having to use any real world identity that can be traced back to. This anonymity gives cybercriminals the perfect mask to hide behind when committing different types of frauds. Even if a cybercriminal wants to convert the cryptocurrency into hard currency, he or she can easily obscure the money trail by converting the cryptocurrency into another form of digital currency before finally transferring it into a bank account. Even though bank accounts can be traced to a real identity, by obfuscating their tracks, it becomes difficult to follow the money trail. Because real-world identities can be concealed in transactions using cryptocurrency, it has become the subject of controversy, widely criticized as a major driving force for cybercrimes.
Cryptocurrency has spiked in popularity in recent years due to the many benefits that come along with their usage. For one, cryptocurrencies are designed in a way that makes it difficult for outsiders to manipulate the system, keeping transactions irreversible and its users under a cloak of anonymity. Cybercriminals in particular have used it to their advantage to mask illegal activities. Because cryptocurrency-enabled cybercrime is costing victims millions of dollars each year, it has become a major concern for governments that are cracking down on cybercriminals. However, due to the nature of Blockchain technology, it will be difficult to crack down on every cybercrime. Read on to find out more!