Cryptocurrency, also known as digital currency or cyber money, is a digital asset created and distributed by computer networks. It’s revolutionizing the financial system globally. Currently, over 400 million people have access to a computer and internet connection. As a result, they can use cryptocurrency easily. However, cryptocurrency cyber crimes are not isolated to just these individuals. Anyone connected to the internet can become a victim of cyber crime if they’re not careful.
Seems like nowadays, criminals don’t always end up behind bars. They actually end up investing in crypto, or, better said, a single coin (no, it’s not Bitcoin) that helps them hide their digital trail. We’re talking about Monero here, a coin and underlying blockchain that emerges as a number one crypto choice for cybercriminals, but also has a base of true believers, anti-establishment and privacy advocates.
What is Monero?
Monero is a cryptocurrency designed to preserve your privacy on the web. It’s a project based on the CryptoNote protocol, which encrypts transactions and makes them untraceable. Monero has the added benefit of being open-source, which ensures nobody can profit from its origin without contributing. Anyone can buy Monero and use it to purchase goods and services online.
Many people use the web for legitimate purposes – such as banking or communicating with friends. However, mainstream corporations have become increasingly interested in tracking users online. This is especially true for social media sites like Facebook and Twitter. To combat this, some people have begun using peer-to-peer networks instead of web servers. These are good alternatives with limited appeal. However, Monero aims to bridge the gap between these two types of platforms by offering privacy and security for both.
Monero uses a mining process that keeps the majority of coins in circulation. Miners access an encrypted pool of transaction data from past block generations and confirm new additions to the network. Doing so requires a lot of computational power and precious materials like gold or silver.
As a result, only a small number of people can afford to mine Monero without special equipment. This keeps the number of available coins low and preserves scarcity among existing coins. Additionally, this process prevents people from mining new coins without powerful hardware.
Monero has an established community of users and dedicated developers. The project first appeared in 2014 under the name ‘Bitmonero’ before adopting its current name in February 2018. Since then, a single coin has consistently carried the majority of total market capitalization among CryptoNote cryptocurrencies.
Over 2,600 GitHub repositories reference projects based on the CryptoNote protocol, with many more based on Bytecoin (BCN) and Subvertcoin (SVC). In fact, CryptoNote has become so popular that nearly every other coin uses the same engine – known as the CryptoNight algorithm – to create theirs.
The Emergence of Crypto Cyber Crime
Cyber criminals have found ways to make money off of people naïve to cryptocurrency by hacking accounts and selling cryptocurrency stolen from them. Cyber crime is becoming increasingly common as perpetrators become more sophisticated in hiding their identities. Many cyber crimes are committed online, making stolen currency easy to sell and use. Digital wallets are the primary targets for cyber crime when people set up new accounts.
Stolen cryptocurrency can be sold to buyers looking to purchase digital goods. Although cryptocurrency transactions are not completely anonymous, it’s much easier for cyber criminals to avoid being caught when conducting transactions online.
Cryptocurrencies are quickly replacing traditional payment methods when purchasing goods and services online. People are starting to realize that using a credit card exposes you to merchant fees and credit card scams. Cryptocurrencies offer low fees and provide more safety for online transactions. Unfortunately, cyber criminals have found out that many people use their computers or mobile phones to browse the web and shop online. This makes these platforms prime targets for cyber crime when targeting online shoppers. Fortunately, there are measures we can take to protect ourselves from these attacks; you just have to be aware of them in order to adjust your security settings appropriately.
Cybercrime has become a very lucrative business for perpetrators – especially when considering how widespread cryptocurrency has become. All the attackers need to do is put their plans into action and target people with accounts on various websites for their valuable information – including credit card numbers and addresses. Doing so allows them to earn money from stealing other people’s accounts without ever having to meet them face-to-face.
Cryptocurrency is revolutionizing the way we conduct financial transactions online, but it’s also opening the door for cybercrime. Therefore, it’s important we stay informed regarding cybersecurity so we can protect our accounts from being hacked and monetized through cyber crime activities.
How Do Crypto Cybercriminals Operate?
Cryptocurrency cyber crimes are far from simple and involve many tactics. For example, thieves will use Trojan horses that secretly install malware on a user’s computer or smartphone without their consent. This allows them to secretly spy on the user’s activity without their knowledge and make fraudulent transactions off the user’s data.
Other common scams involve fake cryptocurrency websites that look legitimate but are actually scamming websites run by cyber criminals. After gaining user information on other platforms (like Facebook), these websites will use that information to make more convincing fake cryptocurrency websites that direct users to the cyber criminal’s website. Once the user enters their banking information, the cyber criminal makes fraudulent transactions on the user’s bank account – allowing them to steal money directly from their bank account without them realizing it.
Initial coin offerings (ICOs) are a new way for cyber criminals to make money. They’re similar to crowdfunding projects where individuals or companies seek funding through an electronic system. However, it’s not completely fair since only a select few are able to launch an ICO and gain the money. To launch an ICO, you need expensive software, a payment system and access to a computer or smartphone. However, you don’t need any of these things to commit cyber crime – simply have access to one of these resources and it’s possible to be the bad guy.
Cryptocurrency cyber crimes are rapidly increasing worldwide due to new ways cyber criminals are using new technologies like ICOs and social media websites. Anyone connected to the internet can become a victim of this crime if they’re not careful enough when using cryptocurrency. Whether it’s hacking attempts or selling fake cryptocurrency, there’s always money to be made from cyber crime when there’s access to a computer and internet connection.
Why Criminals Choose Monero and Not Bitcoin?
At first, Bitcoin seemed to provide the best solution to everyone who wanted to bypass the regulatory eye – cybercriminals, the ones that do money laundering, and the ones funding terrorist attacks. However, it turned out that it was almost as easy as ABS to track transactions through Bitcoin, which is why criminals started looking for a decent alternative – privacy coins.
Nowadays, when financial times are such that more and more countries are accepting Bitcoin as a payment option, it is essential to regulate the field, which was the topic largely discussed on the largest Bitcoin conference in history. From this point of view, it is hard to imagine that Monero and regulation would ever be mentioned in the same breath, and here’s why.
Monero emerges as crypto that is the most popular privacy coin that enabled hiding sender/receiver details, as well as the number of coins transferred – exactly what criminals and ransomware gangs needed, as they can remain anonymous. Bitcoin transfers are public and Bitcoin leaves a visible trail, so transferring funds to crypto exchange is simply not possible without KYC – “Know Your Customer”, the process of customer’s identity verification that is used as a hedge against corruption, fraud, terrorist financing, and most often, money laundering. A public ledger helps with this.
For instance, Coinbase, a reputable crypto exchange, uses KYC verification, which is also why they haven’t listed Monero. Binance, Kucoin, and Gate.io are among a few exchanges that have listed this privacy coin, although most exchanges have de-listed it for its illegal associations.
This, at the same time, poses one of the biggest limitations for Monero. It is not as liquid as other cryptos since it can’t be traded on not that many platforms, which makes it trickier for criminals to get paid than if they used other coins. It is also a bit hard for corporations to get a hold of this crypto, while exchanges listing it can risk losing their license.
Speaking of crypto exchanges, do you know what is the cheapest way to invest in Bitcoin or any other cryptocurrency, including Monero? Exactly, the choice of the trading platform matters a lot. Some people trade Monero on the above-mentioned exchanges just because it has decent price volatility. In the past 24 hours, the coin went from $123,31 to almost $130. A couple of days ago, it was trading at $118, which makes it clear that not all Monero holders use it for criminal activities but some of them do it just for profit.
Monero focuses on anonymity and makes it practically impossible to identify users. Every time a transaction is performed, a one-time stealth address is created, and then, not only the sender but a “ring” of users signs the transaction, which makes it hardly possible to identify the actual sender and the owner of the right stealth address. This is exaclty what bad guys want – the ultimate freedom to hide all of the transaction details.
Not even the best law enforcement agencies managed to trace either of these privacy coins. As a result, some countries such as South Korea and Japan have banned the use and possession of privacy coins, Monero included, while others are considering banning them. As a matter of fact, this comes as no surprise, since concealing identities indeed facilitates cybercriminal activities.
Are Criminals The Only Ones Using Monero?
REvil and DarkSide are on the list of criminal groups that accept payments in Monero. Both groups were initially accepting Bitcoin, however, REvil removed this payment option in 2020 while DarkSide still accepts Bitcoin blockchain payments but charges an additional 10 to 20% fee to those who still opt for this payment method.
Dark web marketplaces are now accepting Monero as well, mostly for drug or gun selling. 10 to 20% of ransoms were paid in Monero during the last year while it was believed that this privacy coin would be used for paying more than 50% of ransoms by the end of 2021.
According to the latest data, this coin takes a high third place when it comes to the number of developers working on it, right after Bitcoin and Ethereum. Still, most of the developers from the Monero community remained anonymous until this day.
On the other hand, the reason for the coin’s popularity among crypto afficionados is simple – there are so many people who prefer that their transactions remain untraceable, some of them being cyber criminals.
However, the truth is that not only criminals but many other, regular people prefer having their transactions a closely kept secret. Monero and other privacy coins, such as Dero or Verge, can offer that. For instance, Verge has been used for Pornhub subscription payments, and, in such cases, we can, kind of, understand moral and legal reasons behind this privacy coin’s utility.
Monero enthusiasts believe that there’s a major flaw with Bitcoin since it doesn’t provide a fully private financial system. In their opinion, electronic cash should be entirely private and knowing where and who the money is coming from should be of no importance in the Web3 world. Having in mind all of the pros and cons of cryptocurrency, Monero advocates certainly consider its untraceable nature a huge benefit.
However, it is true that criminals and purveyors of hate are the ones using this coin the most.
It is more than clear why Monero emerges as the best crypto choice for cybercriminals and an increasingly sought after tool in this regard. Monero, as well as other privacy coins, such as DASH, allow users to transact on an anonymous basis, which is why those who are after illicit payments or the ones who want to evade taxes use them so much.