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Bitcoin Criminal Activity

Bitcoin Is Too Hot For Criminals. They're Using Monero Instead

Bitcoin Is Too Hot For Criminals. They're Using Monero Instead

Bitcoin is too hot for criminals. They're using monero instead by Ivana Kottasov @ivanakottasova January 3, 2018: 12:32 PM ET Bitcoin is becoming too hot for criminals so they're switching to more obscure cryptocurrencies such as monero, according to European law enforcement officials. Just as bitcoin has skyrocketed in value and popularity, so has the attention given to the digital currency by law enforcement agencies, making it a less attractive method of payment in the criminal world. Europe's top law enforcement official -- Europol executive director Rob Wainwright -- tweeted Tuesday that there will be a "progressive shift in 2018 towards criminal use of cryptocurrencies other than bitcoin." That shift makes it "more challenging for law enforcement to counter," he added. Experts say bitcoin is becoming too mainstream, and therefore too risky, for criminals. Related: Bitcoin mania: What the big names of finance are saying "The fact that bitcoin is constantly in the spotlight makes it more valuable for investors, but certainly less valuable for its earliest fans -- criminals -- giving rise to interest in other alternative cryptos designed to avoid tracking," said Daniele Bianchi, assistant professor of finance at Warwick Business School. The number of cases where criminals have been identified through bitcoin tracing is increasing, according to Europol. Companies such as Elliptic and Chainalysis specialize in tracking bitcoin transactions, linking them to companies and individuals, and they work closely with law enforcement agencies. Bitcoin may be challenging to track, but each transaction provides investigators with information that can lead them to the IP addresses of the computers sending and receiving the payment, the amount of bitcoins transferred and a timesta Continue reading >>

Study Suggests 25 Percent Of Bitcoin Users Are Associated With Illegal Activity

Study Suggests 25 Percent Of Bitcoin Users Are Associated With Illegal Activity

In a newly published paper on the use of bitcoin for illegal activity, researchers from the University of Sydney, the University of Technology Sydney and the Stockholm School of Economics in Riga indicate that a quarter of all bitcoin users are associated with illegal activity. The use of bitcoin for illicit purposes has long been the most controversial aspect of the cryptoasset, although it has taken a back seat to speculation around the bitcoin price over the past few years. In addition to estimating the scale of illegal activity involving bitcoin, the research paper also claims this sort of activity accounts for a significant portion of bitcoins intrinsic, underlying value. In the paper, which was co-authored by Sean Foley, Jonathon R. Karlsen and Tlis J. Putni, publicly available information is used as the basis to identify an initial sample of users involved in illegal activity on the Bitcoin blockchain. Seizures of bitcoin by law enforcement, hot wallets of darknet markets, and Bitcoin addresses on darknet forums are used here, in addition to the trade networks of users who were identified in this data set. Additionally, the researchers use a formula of their own creation to detect users likely to be involved in illegal activity by analyzing the entire public blockchain up until the end of April 2017. The formula for detecting criminals on the blockchain involves a wide variety of metrics such as transaction count, transaction size, frequency of transactions, number of counterparties, the number of darknet markets active at the time, the extent the user goes to conceal their activity and the degree of interest in bitcoin in terms of Google searches at the time. Bitcoin users that are involved in illegal activity differ from other users in several characteristics, Continue reading >>

Bitcoin Price Is So High Because Criminals Are Using It For Illegal Trades, Research Suggests

Bitcoin Price Is So High Because Criminals Are Using It For Illegal Trades, Research Suggests

Bitcoin price is so high because criminals are using it for illegal trades, research suggests If they were to reject it for more privacy-focused digital currencies, its value is 'likely'to fall, according to the study Almost half of all bitcoin transactions are associated with illegal activity, a new study has concluded. Researchers have also linked a quarter of bitcoin users with crime, such as hacks, money laundering and the trading of drugs and illegal pornography. Worryingly for investors, they believe that the sheer popularity of the cryptocurrency amongst criminals is a major contributor to its value. If criminals turn their backs on bitcoin and start embracing more privacy-focused digital currencies, its value is likely tofall, the researchers say. Designed by Pierpaolo Lazzarini from Italian company Jet Capsule. The I.F.O. is fuelled by eight electric engines, which is able to push the flying object to an estimated top speed of about 120mph. A humanoid robot gestures during a demo at a stall in the Indian Machine Tools Expo, IMTEX/Tooltech 2017 held in Bangalore A humanoid robot gestures during a demo at a stall in the Indian Machine Tools Expo, IMTEX/Tooltech 2017 held in Bangalore Engineers test a four-metre-tall humanoid manned robot dubbed Method-2 in a lab of the Hankook Mirae Technology in Gunpo, south of Seoul, South Korea Engineers test a four-metre-tall humanoid manned robot dubbed Method-2 in a lab of the Hankook Mirae Technology in Gunpo, south of Seoul, South Korea The giant human-like robot bears a striking resemblance to the military robots starring in the movie 'Avatar' and is claimed as a world first by its creators from a South Korean robotic company Engineers test a four-metre-tall humanoid manned robot dubbed Method-2 in a lab of the Hankook Continue reading >>

Bitcoin Value Surge Sign Of Criminal Activity - Washington Times

Bitcoin Value Surge Sign Of Criminal Activity - Washington Times

By Dan Boylan - The Washington Times - Thursday, August 10, 2017 The value of the shadowy digital currency known as bitcoin has jumped to record highs this month, sending shock waves through Americas defense and intelligence agencies, which fear its growth signals a surge in use by terrorists, drug kingpins, white-collar criminals and Russian cybercriminals who dont want to be tracked by the worlds governments. This summer, the U.S. Treasurys Financial Crimes Enforcement Network (FinCEN), the Department of Justice and scores of European illicit finance law enforcement officials have fought back with a wave of operations against Russian cybercriminals. Late last month, they shuttered AlphaBay and Hansa two of the biggest dark web contraband marketplaces rife with the illegal sale of guns, drugs and other forbidden merchandise. In an even more startling sign of the battle raging around bitcoin, a FinCEN-led international illicit financing task force arrested a Russian mastermind of organized crime on a small beachside village in northern Greece less than two weeks ago. Alexander Vinnik, who is accused of laundering more than $4 billion worth of illegal funds using bitcoin accounts, operated BTC-e, one of the worlds oldest bitcoin exchanges. U.S. authorities accuse Mr. Vinnik of facilitating crimes including drug trafficking, public corruption, hacking, fraud, identity theft and tax refund fraud. Just as new computer technologies continue to change the way we engage each other and experience the world, so too will criminals subvert these new technologies to serve their own nefarious purposes, Brian Stretch, U.S. attorney for the Northern District of California, said about BTC-e. Mr. Vinnik was arrested amid worldwide cyberhavoc triggered by massive WannaCrys Bitcoin ranso Continue reading >>

The Law Is Catching Up With Bitcoins Criminal Associations

The Law Is Catching Up With Bitcoins Criminal Associations

The Law is Catching Up with Bitcoins Criminal Associations Bitcoins high praise since 2009 has been popularly met with stiff resistance on the other side of the fence. Several investors, famously including Jamie Dimon, the CEO of JPMorgan, have dismissed the cryptocurrency as worthless for everything apart from criminal activity. While bitcoin does have legitimate uses and has proven so in the many years of its existence, it definitely has a notorious track record. Only this year, a notorious malware dubbed WannaCry made headlines for infecting thousands of computers worldwide. The malware would encrypt all the data on a computer. Users were then greeted with a bitcoin address to which they were asked to send $300 before a particular date. Usually known as cyber-ransom, users would only regain access to their data if they forked over the requested bitcoin. This ransomware attack was made a lot easier entirely because of the pseudonymous and decentralized nature of bitcoin transactions. It is obvious why most contemporary ransomware attacks prefer to use cryptocurrency instead of cash. Bitcoin is also commonly used on the Dark Net , where illegal activities such as human trafficking and drugs run rampant. Law enforcement agencies have been trying to catch up with criminals using the technology and have made notable advancements in that direction. Almost every cryptocurrency uses a public ledger to keep track of transactions in the form of a blockchain which means that anyone can track an amount of bitcoin as it leaves a wallet. The strategy is similar to what governments have already been using to track money since the pre-digital era and has often been phrased as a paper trail. Chainalysis , a company founded in 2014, exists specifically for blockchain analysis. One of Continue reading >>

The Criminal Underworld Is Dropping Bitcoin For Another Currency

The Criminal Underworld Is Dropping Bitcoin For Another Currency

Bloomberg the Company & Its Products Bloomberg Anywhere Remote LoginBloomberg Anywhere Login Bloomberg Terminal Demo Request Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. The Criminal Underworld Is Dropping Bitcoin for Another Currency Monero and others lure criminals as bitcoins privacy weakens Some coins post fake blockchain entries to hamper surveillance Bitcoin is losing its luster with some of its earliest and most avid fans -- criminals -- giving rise to a new breed of virtual currency. Privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash. The European Unions law-enforcement agency, Europol, raised alarms three months ago, writing in a report that other cryptocurrencies such as monero, ethereum and Zcash are gaining popularity within the digital underground. Online extortionists, who use ransomware to lock victims computers until they fork over a payment, have begun demanding those currencies instead. On Dec. 18 hackers attacked up to 190,000 WordPress sites per hour to get them to produce monero, according to security company Wordfence. For ransomware attacks, monero is now one of the favorites, if not the favorite Continue reading >>

Why Criminals Can't Hide Behind Bitcoin

Why Criminals Can't Hide Behind Bitcoin

Bitcoin, the Internet currency beloved by computer scientists, libertarians, and criminals, is no longer invulnerable. As recently as 3 years ago, it seemed that anyone could buy or sell anything with Bitcoin and never be tracked, let alone busted if they broke the law. “It’s totally anonymous,” was how one commenter put it in Bitcoin's forums in June 2013. “The FBI does not have a prayer of a chance of finding out who is who.” The Federal Bureau of Investigation (FBI) and other law enforcement begged to differ. Ross Ulbricht, the 31-year-old American who created Silk Road, a Bitcoin market facilitating the sale of $1 billion in illegal drugs, was sentenced to life in prison in February 2015. In March, the assets of 28-year-old Czech national Tomáš Jiříkovský were seized; he’s suspected of laundering $40 million in stolen Bitcoins. Two more fell in September 2015: 33-year-old American Trendon Shavers pleaded guilty to running a $150 million Ponzi scheme—the first Bitcoin securities fraud case—and 30-year-old Frenchman Mark Karpelès was arrested and charged with fraud and embezzlement of $390 million from the now shuttered Bitcoin currency exchange Mt. Gox. The majority of Bitcoin users are law-abiding people motivated by privacy concerns or just curiosity. But Bitcoin’s anonymity is also a powerful tool for financing crime: The virtual money can keep shady transactions secret. The paradox of cryptocurrency is that its associated data create a forensic trail that can suddenly make your entire financial history public information. Get more great content like this delivered right to you! By signing up, you agree to share your email address with the publication. Information provided here is subject to Science's privacy policy. Read more of our specia Continue reading >>

Australian Researchers Say Nearly Half Of All Bitcoin Transactions Are For Illegal Activity

Australian Researchers Say Nearly Half Of All Bitcoin Transactions Are For Illegal Activity

Australian researchers say nearly half of all Bitcoin transactions are for illegal activity Bitcoin ATMs pictured in Hong Kong Photo: Anthony Wallace / AFP / Getty Images Australian researchers used forensic finance techniques to investigate what Bitcoin is used for. Despite hype around the supposed anonymity of cryptocurrencies, they say once you start digging its surprising how much sense you can make of it. They find half of transactions facilitate illegal trade, while legal users are mainly buying and holding the currency. Almost half of all transactions in bitcoin are associated with buying and selling illegal goods and services, including drugs, weapons and pirated software, according to analysis using forensic finance techniques. Talis Putnins, a Professor at the University of Technology Sydney, says blockchain technology underpinning bitcoin holds significant promise for revolutionising many industries. But this sort of illegal activity risks stunting the adoption of this technology and limiting the potential benefits to society, he says. Putnins and Jonathan Karlsen from UTS Business School, along with Dr Sean Foley from Sydney University, tracked illegal bitcoin use worldwide using data from 2009 to 2017. In their soon to be published paper Sex, Drugs, and Bitcoin the researchers say around one third of bitcoin users are using the digital currency for illegal activity, with close to half of all bitcoin transactions, and about one quarter of the total dollar value, facilitating illegal trade. The aim of our research is to help regulators understand the size of the task they face in attempting to monitor and regulate bitcoin, particularly as it becomes mainstream for example listing on futures exchanges, says Putnins. Users involved in illegal activity are very Continue reading >>

Startups Helping Thefbicatchbitcoin Criminals

Startups Helping Thefbicatchbitcoin Criminals

When police in the United Kingdom's South East Organized Crime Unit wanted to catch a drug dealer who was anonymously selling large quantities of MDMA through a dark web marketplace, they called Tom Robinson. Robinson,the co-founder of UK-based Elliptic--acompany that uses forensics to track criminals using cryptocurrencies like bitcoin --helped police identify the26-year-old Portsmouthdealer , who was later arrested and sentenced to 16 years in prison. Elliptic is part of an emerging group of startups fighting crime in the burgeoning Wild West ofcryptocurrency. Whether its to intercept drug sales, money laundering, oreven kidnapping ransoms, startups from the U.S. to the U.K. are making and licensingforensic software to law enforcement agencies all over the world. JasonWeinstein, co-founder ofthe Blockchain Alliance ,an organization that brings together data analysis companies with law enforcement agencies to combat criminal activity on the blockchain, says the forensic software industry making tools to track bitcoin transactions is "booming." Criminals were some of the first wave of early bitcoin adopters because of a misconception that the digital currency was untraceable and completely anonymous. But now, says Alan Cohn, a lawyer who is the co-chair of Steptoe & Johnson's blockchain and digital currency practice, bitcoin and other cyrptocurrenciescould be a criminal's worst nightmare. Every bitcoin transaction is recorded to a public ledger called the blockchain, which acts as adatabase that tracksevery dollar ever spent in bitcoin. "Criminals should run, not walk, away from bitcoin," says Cohn, whoco-found theBlockchain Alliance with Weinstein. These crime-fightingsoftwarestartupshelp law enforcement agencies--includingEuropol, the FBI, DEA, and the Department of Continue reading >>

Criminals Are Cashing In On Bitcoins For Illegal Activity From Buying Drugs, Hiring Hitmen And Forging Passports On The Dark Web

Criminals Are Cashing In On Bitcoins For Illegal Activity From Buying Drugs, Hiring Hitmen And Forging Passports On The Dark Web

Criminals are cashing in on Bitcoins for illegal activity from buying drugs, hiring hitmen and forging passports on the Dark Web A Sun investigation has now proved that Bitcoin is linked to a range of serious crimes on the Dark Web THE smartly dressed young woman barely attracted a glance as she swept into the second-hand electronics store and approached the Bitcoin machine. Standing there for half an hour, she peeled off 50 notes from a fat roll and fed them into the slot until 10,000 in sterling had been converted into the electronic currency that only exists online. A Sun investigation revealed how criminals are using bitcoins on the Dark Web When she came back the next day to do the same, store manager Simao Arinto became suspicious. It was 50 after 50 after 50, said the boss of the CeX store in central Londons Tottenham Court Road. She told us she got some kind of insurance that paid out for some kind of disease. What was the truth? Who knows? The police, however, believe they do know the truth, warning this week that this fast-growing digital cryptocurrency is being exploited by organised criminals who use Bitcoin cashpoints to launder dirty cash. Bitcoin machines can now be found on the High Streets Bitcoins were being traded for around $20,000 each yesterday as speculators created the biggest buying rush the world markets have ever seen. Some exchanges saw the value of the digital currency 52 percent rise at its peak yesterday with the past seven days seeing a 72 per cent rise. The astronomical price increasesdriven by demand for the coins the numbers of which are limitedare the biggest in the history of modern financial markets, even beating Tulip Mania, a 17th century financial crash that became known as the first financial bubble. Bitcoins price has gone up Continue reading >>

Using Bitcoin Or Other Cryptocurrency To Commit Crimes? Law Enforcement Is Onto You

Using Bitcoin Or Other Cryptocurrency To Commit Crimes? Law Enforcement Is Onto You

Using Bitcoin Or Other Cryptocurrency To Commit Crimes? Law Enforcement Is Onto You I write and consult on digital transformation in the enterprise. Opinions expressed by Forbes Contributors are their own. Speculative bubble or no, perhaps the greatest challenge facing Bitcoin, cryptocurrencies in general, and the broader world of blockchain is the fact that all of these efforts in some way support criminal endeavors. Ive written about how criminal enterprise is largely responsible for the value of Bitcoin , and to be sure, it drives the demand for many alternative cybercurrencies as well. However, regardless of whether you believe cryptocurrency is all about facilitating crime vs. crime being but a small, unfortunate side effect of the rise of crypto coinage, theres no arguing with the fact that global law enforcement recognizes that cryptocurrency is the criminals playground. In fact, four primary areas of criminal activity lend themselves to cryptocurrency: tax evasion, money laundering, contraband transactions, and extortion not to mention the theft of cryptocurrency itself, which is all too easy with Bitcoin. Cryptocurrencies have actually led to a massive cat and mouse game with law enforcement, as agencies get better at identifying criminal behavior, while criminals come up with new evasion techniques and increasingly anonymous cybercurrencies in order to defeat the efforts of law enforcement. While much of this innovation in the greater cybercurrency/blockchain arena aligns with the interests of criminals, there is another side to this story: the increasing recognition that law enforcement requires its own technological innovation in order to keep up. Steve Garfield, Jrn Eriksson, and Jason Bloomberg Cryptocurrency: Criminal vs. Law Enforcement Cat-and-Mouse Ga Continue reading >>

Bitcoin: Crooks Drop Bitcoin For Monero Cryptocurrency | Fortune

Bitcoin: Crooks Drop Bitcoin For Monero Cryptocurrency | Fortune

Bitcoin is the worlds most popular digital currency but, in the crypto community, complaints are growing: Bitcoin takes too long to process transactions, the fees are too high, its expensive, and too volatile . One sign of this discontent is reports that online criminalswho are among bitcoins oldest and most dedicated usersare ditching it in favor of different currencies that offer a better user experience and more privacy. Stories of crooks looking for bitcoin alternatives are not new, but there is an increasing amount of evidence the currency is falling out of favor in the underworld. This includes a new report by the forensic firm Chainalysis that says the proportion of bitcoin transactions related to dark web sites, where people often engage in criminal activities, has fallen from 30% to under 1%. A big part of this drop is because far more people are using bitcoin, and are choosing to hold it rather than spend it. But Chainalysis, which counts many law enforcement agencies among its clients, also cites the growing use on the dark web of other currencies like Monero , Dash, and Zcash . These newer currencies not only offer faster and cheaper transactions, but also include extra layers of anonymity that make them far more difficult to track than bitcoin. Indeed, the Executive Director of Europol, Rob Wainwright, warned this trend is already underway. Well see a progressive shift in 2018 towards criminal use of cryptocurrencies other than Bitcoin, making it generally more challenging for law enforcement to counter, said Wainwright on Twitter . Meanwhile, a detailed report on the topic last week by the tech site ZDNet cited several researchers who claimed that high fees and sluggish transactions times are causing crooks to move to Monero. The phenomenon reportedly ext Continue reading >>

Professor Yuzhe Tang On Bitcoin, Criminal Activity And How Digital Currency Disrupts Traditional Banking

Professor Yuzhe Tang On Bitcoin, Criminal Activity And How Digital Currency Disrupts Traditional Banking

College of Engineering and Computer Science faculty Bitcoins recent price swings have given a lot of people reason to take a closer look at the global digital currency and how it works. Yuzhe (Richard) Tang,assistant professor in the College of Engineering and Computer Science , says that while Bitcoin is a currency like the U.S. dollar, investors need to understand that it is not subject to the same oversight. Traditional currency relies on trusted third parties. Authorities like government mints are responsible for creating bills and credit card organizations, in some sense, monitor the circulation by having transaction history stored in the so-called ledger databases. In Bitcoins, however, there is no central authority, says Tang. Bitcoin doesnt want a single third party that oversees everything. Bitcoin is built on what is known as a Nakamoto consensus protocol a distributed computation process that dictates what transactions should be included in the blockchain. The security of a consensus protocol relies on the majority of users being honest. Using blockchain technology, Bitcoins are mined by computers solving complicated cryptographic puzzles. Users then have Bitcoins available for payment and investment. The process requires powerful computer hardware. In theory, a hacker looking to disrupt the currency could mine blocks of Bitcoins and take them out of circulation, but Tang says that appears unlikely at this point. If I want to subvert the Bitcoin network, I would need to invest a lot of money to compete with the rest of the world, says Tang. If dishonest miners ever outnumbered honest miners, Bitcoin could fail, but this is very difficult given the current (large) scale of Bitcoin network. Tang does have concerns about criminals using Bitcoin as their currenc Continue reading >>

Bitfury Enters Bitcoin Crime-fighting Business

Bitfury Enters Bitcoin Crime-fighting Business

Bitfury Enters Bitcoin Crime-Fighting Business Jan 30, 2018 at 05:01 UTC|UpdatedFeb 2, 2018 at 19:01 UTC Bitfury isn't waiting for law enforcement to clean up the bitcoin space. After years of working with government agencies leery of bitcoin's seedy past, the blockchain services firm best known for its bitcoin transaction processing business has decided to take matters into its own hands. Launched today, a number of tools collectively identified as Crystal are intended to make it easy for users to identify and investigate criminal activity on the world's largest blockchain. But that's not to say that the end goal of Crystal is philanthropic. Developed over a two-year period with feedback from former senior-level government officials, the platform was ultimately created to help bitcoin once and for all move past its association with black market transactions. The next time potential Bitfury customers balk at getting involved with the cryptocurrency, the CEO of Bitfury Group, Valery Vavilov hopes Crystal will provide a solution. "The industry needs some very user-friendly tools so that you can track bitcoin transactions and see if this bitcoin address that you're getting money from is green or black." Beginning today, a free demo license of the Crystal software will be made available to qualified individuals, with pricing for web and enterprise subscriptions to be released in March. The core of the toolkit is a detailed risk scoring solution that helps law enforcement agents and investigators trace suspicious transactions to a final address, or a point of withdrawal. By tracking the relationships between so-called "bad actors," Crystal will generate a score of the likelihood a particular address is related to illegal activity. The results of the data analysis are then p Continue reading >>

Sex, Drugs, And Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies?

Sex, Drugs, And Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies?

University of Technology Sydney (UTS) - Faculty of Business; Stockholm School of Economics, Riga; Financial Research Network (FIRN) Cryptocurrencies are among the largest unregulated markets in the world. We find that approximately one-quarter of bitcoin users and one-half of bitcoin transactions are associated with illegal activity. Around $72 billion of illegal activity per year involves bitcoin, which is close to the scale of the US and European markets for illegal drugs. The illegal share of bitcoin activity declines with mainstream interest in bitcoin and with the emergence of more opaque cryptocurrencies. The techniques developed in this paper have applications in cryptocurrency surveillance. Our findings suggest that cryptocurrencies are transforming the way black markets operate by enabling black e-commerce. Keywords: blockchain, bitcoin, detection controlled estimation, illegal trade Foley, Sean and Karlsen, Jonathan R. and Putni, Tlis J., Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies? (January 15, 2018). Available at SSRN: or Continue reading >>

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