Author: Samani, Raj
Title: Digital Laundry: An analysis of online currencies, and their use in cybercrime
Summary: The European Central Bank (ECB) points out notable differences between virtual currency and electronic money schemes. Electronic money uses a traditional unit of currency and is regulated; virtual currencies are unregulated and use an invented currency.
Virtual currencies offer a number of benefits to customers: They are reliable, relatively instant, and anonymous. Even when privacy issues have been raised with particular currencies (notably Bitcoin), the market has responded with extensions to provide greater anonymity. Market response is an important point because regardless of law enforcement actions against Liberty Reserve and e-gold, criminals quickly identify new platforms to launder their funds.
As a platform grows in popularity, so too will attacks and subsequent law enforcement actions. We saw this recently with Liberty Reserve and e-gold, and the recent cyberattacks against Bitcoin. Increasing popularity also raises the attention of
law enforcement officials. Despite such platforms establishing their operations in countries considered as "tax havens," its operators are still subject to investigation, and possibly arrest. This concern recently led to the Russian Foreign Ministry
warning its citizens who suspect they may be arrested to avoid countries with extradition treaties with the United States.
The warning cited the arrest of Liberty Reserve's founder as an example. Although money laundering and cyberattacks are the focus of this paper, electronic currencies also act as the main method of payment for illicit products such as drugs, as well as for other products and services that enable cybercrime. We
discussed products and services in Cybercrime Exposed: Cybercrime-as-a-Service; we'll look at drugs in this paper when we discuss the Silk Road market. The Silk Road is the best known online drug market but it is only the tip of the iceberg, as there are numerous such marketplaces.
Regardless of the level of scrutiny by regulators and law enforcement, criminals will continue to migrate activities to alternate platforms. They have done this with Liberty Reserve and e-gold, to name two examples; simply shutting down the leading platform will not solve the problem.
Details: Santa Clara, CA: McAfee, 2013. 17p.
Source: Internet Resource: Accessed May 10, 2014 at: http://www.mcafee.com/us/resources/white-papers/wp-digital-laundry.pdf
Year: 2013
Country: International
URL:
Shelf Number: 132315
Keywords:
CybercrimeDigital CrimeFinancial CrimeMoney LaunderingOnline Crime |
