Virtual currencies are being used to enable an extremely wide range of crime – including contract killings – a report by security firm McAfee has revealed.
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“The perceived anonymity of virtual currencies is helping drive crime at a scale not seen before,” said Raj Samani, chief technology officer of McAfee Europe and co-author of the report.
There needs to be better collaboration between the public and private sectors to counter the rising threat of criminal web services enabled by secure, anonymous transactions, he told Computer Weekly.
Samani believes virtual currencies such as Bitcoin and Litecoin need to be a top priority of international crime-fighting efforts because of their increasing popularity with criminals.
Before its operations were closed, the Liberty Reserve digital currency service was used to launder $6bn, resulting in the largest international money‑laundering prosecution to date.
At the start of October, the FBI seized the Silk Road online drug sales site and arrested the suspected kingpin for engaging in a massive money-laundering operation.
“Silk Road is just the tip of the iceberg,” said Samani.
McAfee’s “Digital Laundry” report provides screenshot examples of how digital currencies are used by contract killers calling themselves the Hitman Network and arms dealers selling handguns.
“We include it to demonstrate that confidence in the privacy of virtual currencies has enabled the sale of some frightening services,” the report said.
Read more about virtual currencies
The report warns that, in the cyber world, the abuse of virtual currencies could be extended to targeted attacks on financial exchanges and malware developed to target digital wallets.
But in the physical world, the virtual currency is also being used for extortion and for ransom payments in kidnapping cases, said Samani, who is a member of the European Cybercrime Centre advisory board.
“This demonstrates that although we can argue about the level of anonymity in virtual currencies, for some criminals cash is no longer king,” he wrote in the report.
Many illicit services offer only virtual currency as the method of payment.
“This migration to only virtual currency will likely increase, particularly as such currencies have some very clear advantages for cybercriminals and entrepreneurs,” the report said.
These advantages include the ease of acquisition and use, anonymity, instantaneous transfer, reliability and the fact that transactions are irrevocable.
Virtual currencies will not go away, the report concludes.
“Despite the apparent challenges posed by DDoS attacks, the use of these exchanges for money laundering, and the facilitation of cybercrime, opportunities also abound for legitimate uses.
“Ignoring this market opportunity is likely to cost potential legitimate investors significant revenue, but failure to address the potential risks may cost a lot more,” the report said.