Cyber criminals laundering £142 bn each year using cryptocurrencies

Cyber criminals laundering £142 bn each year using cryptocurrencies

Cyber criminals laundering £142 bn each year using cryptocurrencies

Cyber criminals across the globe launder up to £142 bn each year from the proceeds of their criminal activities and the money they launder constitute an estimated 8-10 percent of total illegal profits laundered globally, security firm Bromium has revealed.

A study commissioned by security firm Bromium has given us an insight into how cyber criminals handle the money that they earn through their malicious activities. The study revealed that cyber criminals across the world share a tendency to launder their money to evade authorities and to hide the true sources of their wealth. A number of them are also spending the proceeds of their criminal activities on property purchases, including penthouse suites and lavish mansions, to 160-acre private islands.

Lack of reliance on Bitcoin

The total amount that cyber criminals launder can go up to £142 bn ($200 bn) per year, forming up to 10 percent of total illegal profits laundered globally, thereby indicating how much money can be earned via cyber crime. While most criminals who carry out clever phishing attacks and use new tricks to inject malware into victims' systems are quite smart in their trade, they are also quite smart in handling their finances.

The study, conducted by Dr. Mike McGuire, Senior Lecturer in Criminology at Surrey University, revealed that aside from laundering their money, cyber criminals are also using virtual currencies regularly, but are nowadays using moving away from Bitcoin to less recognized virtual currencies such as Monero to preserve their anonymity.

They have also been found to use PayPal and other digital payment systems to launder money and also exploiting in-game purchases, notably in China and South Korea, to carry out gaming-currency laundering.

“Today it is easy for hackers to infect machines, steal data, and hold businesses and individuals for ransom or sell stolen IP because enterprise defences are not fit for purpose. It is equally easy for them to wash that money and convert it into cash – and the rise in the use of unregulated, virtual currencies is making this even easier," said Gregory Webb, CEO of Bromium.

"We need to attack the problem in a different way. Law enforcement, the cybersecurity industry and both the public and private sectors need to be vigilant about disrupting cybercrime. Protecting applications that access sensitive data is an absolute requirement. We need a whole new approach to cybersecurity or these figures will continue to increase over time," he added.

Hiding the money trail

By accumulating millions in virtual currencies, cyber criminals use them on websites such as Bitcoin Real Estate to purchase expensive property from penthouse suites and lavish mansions to 160-acre private islands. Lack of scrutiny of such transactions also enables them to easily launder their money using the anonymity of virtual currencies. According to the study, as many as one in every four property sales across the world will take place in cryptocurrency, revealing how attractive the real estate sector is for wealthy hackers.

“It’s no surprise to see cybercriminals using virtual currency for money laundering. The attraction is obvious. It’s digital, so is an easily convertible way of acquiring and transferring cybercrime revenue. Anonymity is also key, with platforms like Monero designed to be truly anonymous, and tumbler services like CoinJoin that can obscure transaction origins," noted Dr. McGuire.

Aside from entrusting their money with virtual currency, cyber criminals are also hiding their money trail by using digital payment systems to launder money. While 10 percent of all criminals use PayPal, 35 percent of them use other payment systems such as Skrill, Dwoll, Zoom, and M-Pesa to confuse law enforcement and financial regulators.

“The growing use of digital payment systems by cybercriminals is creating significant problems for the global financial system. Revenues that previously would have flowed within proven and well-established banking systems and could be traced are now outside of its jurisdiction. Digital payment systems are most effective when combined with other digital resources, like virtual currencies and online banking," Dr. McGuire added.

Copyright Lyonsdown Limited 2021

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