Another (Criminal) Use Case For Bitcoin: Ransom

What is it about bitcoin that keeps it continuously getting tangled into the headlines tied to criminal activity?

To start, the somewhat anonymous nature of bitcoin itself obviously lures criminals to the digital currency. But what’s more is that bitcoin seems to have taken on a new role as being the currency involved in the modern day criminal heist that involves demanding a ransom from vulnerable consumers.

Or, as a New York Times reporter phrased it in his piece about the criminal trend, bitcoin ransom has become the “modern day version of a mob shakedown.”

“The criminal underground very much likes bitcoin,” Curt Wilson, a senior threat intelligence analyst at Arbor Networks, told Nathaniel Popper. “It’s enabled a greater sense of obfuscation.”

Popper, the author of “Digital Gold,” which explores the fascinating history of bitcoin’s past, shares more of his insight about how bitcoin crimes have made the concept of a ransom (previously, briefcases of cash) into computers and cyberattacks.

“Hackers around the world have seized files on millions of computers, taken down public websites and even, in a few cases, threatened physical harm. The victims — who have ranged from ordinary computer users to financial firms and police departments — are told that their only way out is through a bitcoin payment that is sometimes more than $20,000,” Popper wrote.

Perhaps bitcoin’s more recent attractive prices — close to $300 at the moment — has attracted more criminals to the digital currency. Because bitcoin isn’t a government-registered currency it often attracts criminals since the nature of its technology makes it more difficult to track. Not impossible, of course, but more difficult.

But if you look at recent headlines, bitcoin ransoms have seemed to be somewhat of a regular occurrence. For example, as Popper points to in his piece, there was recently an attack suspected to come from Russia and Ukraine that brought in roughly $16.5 million in bitcoin in about a month’s time from ransom attacks from people in the U.S.

And just last week, a report was released by the U.S. Department Of Justice that it had charged two Florida men, Anthony Murgio and Yuri Lebedev, for illegally operating an underground bitcoin exchange. The unlicensed online bitcoin exchange allegedly was used to help “tens of thousands of clients” misdirect roughly $2 million worth of the digital currency. 

Murgio and Lebedev are accused of enabling the transactions for hackers that would prey on people to pay ransom to gain access back to those devices. Those hackers allegedly received payments in bitcoin, which was converted into cash through the bitcoin exchange. And then there was the case about the New Jersey Internet gambling site that was hacked. The hackers demanded bitcoin as ransom, but the ransom was never paid.

And those are just the tip of the iceberg for the number of bitcoin ransom reports.

To check out what else is HOT in the world of payments, click here.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.