“Follow the money” – for generations it’s been the mantra of investigators looking for criminals.
This battle between authorities and criminals has been going on for many years in cyber-realm.
Many cybercriminals were caught with the help of new technologies that allow them to trace their money around cryptocurrency blockchain. This is a publicly available list of transactions made between wallets, regardless of the anonymity of crypto currencies.
Could the tide turn?
On the darknet, a new service was launched that allows criminals to verify how clean their digital currencies are.
The website was created by Dr Tom Robinson who is chief scientist at Elliptic and the founder of this analysis company.
Dr Robinson explained that Antianalysis is a term used by criminals to examine their Bitcoin wallets, and determine if they are associated with any criminal activity.
Elliptic claims that the discoveries show how complex cyber-crime networks have become and how concerned criminals are about being caught.
It’s an extremely valuable method. He said that if your money is tainted you could then continue to launder and attempt to get rid of any association with criminal activities until you have clean coins.”
Robinson said it was a worrying new trend and could affect their law enforcement work. However, the researchers that tested the service say it isn’t very effective at the moment.
It wasn’t very effective at identifying criminal links. It will, however, improve with time. This is going to make it a powerful tool for money-launderers and criminals in the near future.”
All governments around the globe, including those in China and the UAE, are working to address the problem of cryptocurrency money laundering.
Some high-profile cases have resulted from cryptocurrency tracking, such as Graham Ivan Clark (US teenager) who is being held for masterminding the largest-ever social media hacks.
Clark was able to take control of the Twitter accounts for dozens celebrities including Elon Musk and Joe Biden.
Clark and his hacker group then posted a tweet promoting a scam cryptocurrency, receiving hundreds upon hundreds of payments from people hoping to win the giveaway.
Clark quickly made over $100,000 in just two hours and started moving funds to conceal his true identity.
This didn’t work. The US Department of Justice stated that they had “analyzed the blockchain transactions and de-anonymized them, allowing us to identify the hackers.”
Clark is now 18 and has pleaded guilty to the charges. He currently serves three years in Florida Prison.
Privacy coin growth
Authorities are also concerned by the rise in popularity of privacy coins. These cryptocurrencies, such as Monero or XRP, offer greater anonymity than traditional coins like Bitcoin.
Hackers are asking for victims in extortion cases to use these coins as a way of getting a discount.
This is another trend which is still in its infancy. Kim Grauer (director of research at Chainalysis), says that this technique has some drawbacks for criminals.
Privacy coins aren’t being adopted in the way one might expect. They aren’t nearly as easily liquid as Bitcoin or other cryptocurrency.
Cryptocurrency can only be used to buy, sell and cash out in mainstream money. Privacy coins make this much harder.
To hear more about this story listen to Tech Tent on the World Service this Friday at 09:00 BST and afterwards on demand via BBC Sounds.
Publited Fri, 13 August 2021 at 00:24.21 +0000