A new U.K. government report has found that there is a threat posed by digital currencies in cybercrime.
The report, National Risk Assessment of Money Laundering and Terrorist Financing 2017, highlights the governments concerns about the role cryptocurrencies such as bitcoin play in cybercrime.
The report refers to a 2015 NRA, which assessed that the risk of digital currencies linked to money laundering and terrorist financing was low. It adds:
However, the link between digital currencies and cyber-enabled crime
means that this risk is likely to increase.
In 2015, the vulnerabilities identified largely focused on the cross-border exposure and anonymity of cryptocurrencies, in addition to a lack of a regulated environment. This latest report finds that use of digital currencies for money laundering activities appears to be relatively low. Evidence suggests that they are being used to launder low amounts at a high volume rather than large amounts.
When it comes to a cybercrime perspective, the threat posed by cryptocurrencies is higher. According to the report, this is evident in three areas:
- Firstly, digital currencies directly facilitate victim payments to cyber criminals such as malware attacks, ransomware and cybercrimes-as-an-extortion.
- Secondly, digital currencies aid the growth of cybercrime-as-a-service. They are becoming the main payment choice for criminal-to-criminal payments and for the purchase of illegal tools and services online.
- Thirdly, digital currencies play a vital role in laundering the proceeds of cyber dependent crime, directly facilitating cyber criminal financial flows.
According to submitted suspicious activity reports (SARs), between May 2016 and July 2017 there were 1,584 reports referring to cryptocurrencies. The number is reported to be increasing each month.
It adds that the risks are likely to grow as digital currencies become a viable and popular payment method.
As the number of businesses accepting digital currency payments grows, there is an increasing risk of criminals using the currencies to launder funds without needing to cash out into non-digital, or ‘fiat’ currencies.
The report found that the use of cryptocurrencies for terrorist use is unlikely to increase significantly in the next five years.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:01 PM