Cryptocurrency has had many positive effects on the world. But since it's invention, it has also become an important part of cybercrime. Prior to its arrival, cybercriminals didn't have a convenient way of receiving money. Now, they can receive money anonymously from anyone in seconds.

The association between cybercrime and cryptocurrencies are now very well-known. Many people have even gone as far as suggesting that it should be banned as a result. But why is crypto so popular with cybercriminals, and how is it actually used?

Why Do Cybercriminals Use Cryptocurrency?

The popularity of cryptocurrency among cybercriminals is easy to understand. It wasn't invented to help cybercriminals, but much of its functionality is perfect for this purpose.

Cryptocurrency Transactions Are Irreversible

After a payment is made using cryptocurrency, it's not possible for the sender to reverse the transaction. There is no payment protection on crypto payments. There is no bank to contact. Paying somebody with cryptocurrency is identical to paying them with cash.

It Can be Received Anonymously

Anybody can create a cryptocurrency address in seconds and there is no need to provide any type of personal information. Banks and other financial service providers are required to abide by strict know your customer (KYC) laws. It's not possible to open a bank account or use most financial services without verifying your identity. Cryptocurrency addresses, on the other hand, can be completely anonymous.

It's Potentially Untraceable

Cryptocurrency is not as untraceable as many people believe. All transactions are available to view on public blockchains. It's possible for cryptocurrency to be followed and if it enters an address that's tied to a person's identity, the owner can be revealed. This, however, can be prevented with the use of mixers. These services basically transfer cryptocurrency to so many addresses that it becomes untraceable.

It's Arguably Safe to Keep

A successful cybercriminal cannot deposit their income into a bank because there's a big risk of being asked questions about where it came from. The future value of cryptocurrency is obviously debatable but if historical prices are anything to go buy, keeping their income in the form of cryptocurrency can be a viable strategy. Unlike cash, cryptocurrency is also easily hidden and transported.

It's Easier Than Ever to Cash Out

There are now more ways than ever to convert cryptocurrency into cash. Provided the source of illegally obtained cryptocurrency is sufficiently hidden, it can even be used for payment at an increasingly large number of online retailers.

How Do Cybercriminals Use Cryptocurrency?

Cryptocurrency is now used in almost all types of cybercrime. Here are eight ways that cybercriminals profit from cryptocurrency.

Theft

Cryptocurrency is easy to steal, and large amounts are stolen by hackers every year. The biggest attacks are against cryptocurrency exchanges, but private individuals are also targeted using a variety of techniques. This includes phishing attacks and keyloggers which are both designed to steal passwords. This allows cybercriminals to empty cryptocurrency addresses with no possible recourse for the victim.

Ransomware

Cryptocurrency is arguably responsible for the rise in ransomware attacks. Ransomware has been a threat for decades, but it wasn't until cryptocurrency was invented that attackers had a way to demand large sums of money that could be transferred quickly and anonymously. All ransomware attacks now demand that the ransom be paid in cryptocurrency. In large attacks, these demands amount to millions of dollars.

Other Types of Extortion

Ransomware is the most well known type of extortion, and it's also the most effective. But people can be extorted for all types of reasons. If a hacker finds any type of private information on a person's computer, they can contact that person and demand a cryptocurrency payment in exchange for keeping quiet. Many people are even extorted using entirely fabricated threats.

Stolen Information

Cryptocurrency allows hackers to profit from stealing information that they don't actually use. Any type of personal information can now be sold including identity documents and credit card numbers. When a data breach occurs at a large organization, the data is usually sold in bulk in exchange for cryptocurrency. This leads to that data being used for additional cybercrimes, and it motivates hackers to steal more.

Smaller hacks against private email and social media accounts are also profitable for the same reason. Stolen accounts of all types are now resold for cryptocurrency.

Online Scams

Many online scams now specifically ask that the victim pays in cryptocurrency. Most internet users aren't willing to use cryptocurrency for traditional purchases. But there are many scenarios in which people are tricked into sending cryptocurrency to strangers. This includes both romance and investment scams. Cryptocurrency makes it impossible for the victim to get their money back when they figure out what happened.

Cryptojacking

Cryptojacking is the act of using somebody else's device to mine cryptocurrency. This can be achieved in different ways. Some websites mine cryptocurrency on the device of anybody who visits them. Malware is also installed on victims computers to carry out the activity in the background. Some experts believe that cryptojacking is becoming more profitable than ransomware.

Payment for Illegal Services

Cryptocurrency allows illegal services to be sold anonymously. Cybercrime as a Service is becoming increasingly common. This makes cybercrime more profitable and makes it easier for the average person to carry out attacks. Hackers are also available for hire and cryptocurrency allows them to be hired anonymously.

Payment for Employees

Large cybercrime organizations are often structured similarly to traditional businesses. This includes employees of different levels and affiliate marketing arrangements. Cryptocurrency makes all of this possible, allowing everybody to get paid without anyone revealing their identity.

Should Cryptocurrency Be More Heavily Regulated?

Cryptocurrency increases the profitability of cybercrime and some people have suggested that it should be banned or more heavily regulated as a result. The counterargument to this is that preventing cryptocurrency being used will not prevent cybercrime.

Provided the internet remains a popular tool for communication and e-commerce, there will be people who attempt to use it for fraudulent purposes. Many types of cybercrime don't depend on cryptocurrency and many types that do can be carried out using alternative methods.

As widespread adoption of cryptocurrency continues, the possibility of banning such currencies is also becoming increasingly impossible regardless.