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Bitcoin’s role in strong-arming & blackmailing businesses

bitcoin social trading

Cryptocurrencies, if not funneled through an exchange with KYC and AML, are pseudo-anonymous. Still, converting to fiat is tricky, as actions on their public ledgers can easily be tracked. In fact, there are numerous addresses that are “blacklisted” and even some that have found themselves on official US blacklists (alongside with the individuals that control them). Safe to say, there is not a lot of incentive to blackmail individuals and businesses and coerce them into paying with Bitcoin, but criminals still opt to this choice.

They do not realize that even though their current identity is anonymous the authorities are potentially able to track them down as the source of the threats or cyber attacks. This lack of understanding of the public ledger and how transactions are written on it has led to numerous ransomware attacks, and more recently bomb threats.

Both the USA and Canada were under increasing amounts of pressure in the past week as more than 100 bomb threats were issued over email. It seems that a single email circulated and was distributed to various governmental, educational, and transit organizations saying that unless $20,000 in Bitcoin was paid out, a bomb would be detonated.

The authorities in New York and we assume this is happening across the country have responded to each and every one of the threats, carefully analyzing the premises of the establishments that have received such an email, but have concluded that the threats are not credible, as no explosive devices or anything suspicious was found.

Most likely the majority of these threats are hoaxes, but this begs the question, is somebody trying to distract and divert attention from the real threats? The establishments receiving these threats have been vigilant and have reported them, they have taken the necessary steps to evacuate and quarantine the area. Their operations have been disrupted for nothing, as none of the hundred plus institutions actually were under any real threat.

Better to be safe than sorry of course! Especially in the case where schools and public courthouses are being threatened, the risks are simply too great to not take action. The human drive is to avoid danger, and these institutions have gone to great lengths to ensure that everybody is safe.

Past incidents

In the past, however, multiple successful attacks have been conducted, although none of them included any explosive threats. Most of the successful attacks have utilized ransomware to encrypt a company’s or public establishment’s data and demand a Bitcoin payment before decrypting the data. With no guarantee for actual decryption, many businesses have been left without the means to properly manage their situation and have paid the price.

Cybersecurity vulnerabilities are present in every system and network, and in order to truly avoid being a target, companies, as well as public enterprise, needs to step up and invest in their network security. There are thousands of small cybersecurity companies that can set up a secure network, rudimentary encryption and backup policies that would prevent the damage these companies have faced.

Governments are not mentioned here, as they are more than capable of taking care of themselves, which is why none of the targets has been a governmental organization. Cybersecurity is a matter of national security on the government level and as such, it is held in a position of great importance.

Bitcoin is a terrible idea for crime

There are many examples where criminals have been caught after successfully conducting a cyber attack or have had their threat fulfilled. Bitcoin is a public blockchain, meaning that all addresses, as well as transactions, can be monitored and as such the criminals end up owning what authorities call “tainted Bitcoin”.

There are numerous “mixer” services that claim to provide a reasonable obfuscation of these funds, effectively laundering the Bitcoin that was illegally obtained, but their effectiveness and legitimacy are not proven to avoid proper KYC and blacklisting. Especially with government oriented tools such as Exonum, which provide them with the ability to attest “contamination” levels of Bitcoin and other public blockchain currencies.

The whole idea of illegally obtaining Bitcoin or any other currency is a flawed one, leading to a life of depression and unsatisfaction, even if the criminals manage to pull of their crimes. Most of them end up trying the same tactics and get caught, blacklisted, or simply have their funds frozen. We are not here to discuss philosophy or way of life, which is why we are extremely satisfied that most criminals do not truly understand the tracking capabilities when using Bitcoin, leading to their arrests, blacklisting, or removal of stolen property.

Crypto Scams

Another way that Bitcoin has been used to facilitate crime is through deception. We’ve talked about this topic in the past, and provided our readers with the understanding of why scams work, and how to avoid it.

There are thousands of scams to be found in the crypto ecosystem, ranging from fake services, all the way to fake ICOs that promise a return on investment, such as the crypto famous BitConnect. Which we all know how that turned out to work out, as thousands of people got burned in the exit.

Criminals are continually making fake profiles of well-recognized individuals and have created thousands of websites that claim to give away crypto. We don’t know how well these scams work, but most of them appeal to the impulses of individuals looking for a quick buck, or something for free.

It’s coming from the CEO of Binance, this can’t be a scam, right?

Wrong! It’s not the CEO, it’s a fake profile! That’s the reason you need to be skeptical and double-check everything. We are not saying that the CEO of Binance will never give out crypto, although his Twitter handle does say that he will never give away crypto, we are saying that it is highly unlikely that he does!

Be careful out there

By now we expect that a lot of our readers are highly aware of the dangers in this crypto world. That not everything that shines is gold, but repetition is the path to knowledge, so we will remind you as much as it takes. Our readership grows every month, and an influx of newcomers to crypto leads us to write these words of caution.

If you own a company, or somebody close to you owns a small business, make sure to let them know about these dangers. Their entire investment in the business can be gone with a single hack, and many systems have so many vulnerabilities it’s actually easy money for the experienced criminal hackers. Cybersecurity is also a topic for individuals, so make sure to back up your data consistently and to activate all of the necessary security features, such as two-factor authentication.