[ad_1]
In the field of cybercrime, anonymous cryptocurrency is the preferred payment method. But at some point, virtual transportation needs to be turned into cash. Enter “God of Wealth”.
It’s easy if you know where to find treasure hunters. They rent out on Hydra, which is the largest market on the dark web in terms of revenue. This is a part of the Internet that is invisible to search engines and requires specific software to access.
“They will really leave a lot of cash somewhere for you to pick up,” said Dr. Tom Robinson, chief scientist and co-founder of Elliptic, an organization that tracks and analyzes crypto transactions. “They buried it underground or hidden behind bushes, and they would tell you the coordinates. There is a complete profession.”
Russian Hydra provides criminals with many other ways to cash in cryptocurrency, including, for example, exchanging bitcoin for gift certificates, prepaid debit cards, or iTunes vouchers.
The ability to hold cryptocurrencies without revealing your identity makes them increasingly attractive to criminals, especially for hackers who break into the company and demand a ransom.
According to data from the research organization Chainalysis, by 2020, at least $350 million in crypto ransoms will be paid to hacker groups, such as the DarkSide group that closed the colonial pipeline earlier this month.
But at the same time, every transaction in cryptocurrency is recorded on an immutable blockchain, leaving a visible trail for anyone with technical knowledge.
Several crypto forensics companies have sprung up to help law enforcement agencies track criminal groups by analyzing where the currency is flowing.
These include New York-based Chainalysis (which raised $100 million at a valuation of more than $2 billion earlier this year), London-based Elliptic (which owns Wells Fargo among its investors), and CipherTrace, which is backed by the US government.
Dark exchange
Data from Chainalysis shows that in 2020, illegal entities received a total of about 5 billion U.S. dollars in funds, and these illegal entities transferred 5 billion U.S. dollars to other entities, accounting for less than 1% of the total cryptocurrency flow.
In the early days of cryptocurrency, criminals only needed to use major cryptocurrency exchanges to cash out. Elliptic estimates that between 2011 and 2019, major exchanges helped cash out 60% to 80% of Bitcoin transactions from known bad actors.
By last year, as exchanges began to worry more about regulation, many of them strengthened anti-money laundering (AML) and Know Your Customer (KYC) processes, and their share shrank to 45%.
Tighter rules have pushed some criminals into unlicensed transactions, which usually do not require KYC information. Many operate outside jurisdictions with less stringent regulatory requirements, or outside of extradition treaties.
But Michael Phillips, chief claims officer of the online insurance group Resilience, said that such exchanges tend to have low liquidity, making it more difficult for criminals to convert cryptocurrencies into legal tender. “The purpose is to increase the cost of the business model,” he said.
There are also a range of other niche markets entering fiat currencies. Chainalysis’ analysis shows that over-the-counter brokers are particularly helpful in facilitating some of the largest illegal transactions-some of which are clearly established for this purpose.
At the same time, smaller transactions flowed through more than 11,600 encrypted ATMs with little supervision around the world, or through online gambling sites that accept encryption.
Forensic company
In this context, crypto forensics companies use the technology of analyzing blockchain transactions and human intelligence to determine which crypto wallets belong to which criminal group, and to draw a broader and interconnected crypto crime ecosystem map.
Through an overview of how criminals transfer funds, their research specifically reveals how hackers can rent out their ransomware to affiliated networks while taking a deduction from any proceeds.
Kimberly Grauer, Head of Research at Chainalysis, added that hackers are increasingly paying for other criminals’ support services, such as cloud hosting or paying for victims’ login credentials, using cryptocurrencies, and allowing investigators to be more effective. Have a comprehensive understanding of the ecosystem.
“In fact, there is less need to cash out in order to maintain your business model,” Grauer said. This means “we can see the ransom paid, we can see the diversion and flow of all the different players in the system”.
Lost track
But cybercriminals are increasingly using their own high-tech tools and techniques to cover up their encrypted traces.
Some criminals perform so-called “jumping”-jumping between different cryptocurrencies, usually in rapid succession-to lose trackers, or to use specific “privacy coins” cryptocurrencies with additional anonymity, such as gates. Rocoin.
The most common tool used to frighten investigators is a tumbler or mixer-a third-party service that mixes illegal funds with clean cryptocurrency and then distributes it. In April, the Ministry of Justice Arrested and charged A person with dual Russian and Swedish citizenship runs a prolific hybrid service called Bitcoin Fog, which has transferred approximately $335 million in Bitcoin in the past ten years.
“Coins can be unlocked,” said Katherine Kirkpatrick, a partner at the King & Spalding law firm, who is an expert in anti-money laundering. “But it is very technical and requires a lot of processing power and data.”
According to Elliptic, the “preferred obfuscation tool” in 2020-which helped facilitate 12% of all bitcoin money laundering that year-are highly sophisticated “privacy wallets” with anonymization technology, including built-in mixing capabilities.
Robinson said: “They are basically a trustless version of the mixer, all done in software,” and pointed out that an open source project called Wasabi Wallet is a major player in the field.
What’s next?
Tom Kellermann, head of VMware cybersecurity strategy and a member of the U.S. Secret Service Cyber Investigation Advisory Board, said that the authorities “need to modernize confiscations and asset freezes” to make it easier for law enforcement to seize cryptocurrencies from exchanges.
Personal exchanges can now register for the services of forensic companies, which will notify them of suspicious activities based on their intelligence.
But experts have in the past touted the idea of sharing blacklists of wallets known to be used by bad actors—an Interpol alert, where exchanges, analysis groups, and governments publicly share information about their investigations to make this possible.
“Perhaps now is a better time to reconsider some of these policy initiatives,” said Kemba Walden, assistant general counsel of Microsoft’s digital crime division.
[ad_2]
Source link
