Cryptocurrencies And Crime: A 'Cat-And-Mouse Game' With Law Enforcement
Cash was once the preferred form of currency for criminals, but the difficulty in tracing cryptocurrencies has many turning to them for underground activity.
The Currency Of The Dark Web
Bitcoin — encrypted data that's based on blockchain code and is transferrable between people — is almost entirely anonymous. That earned the currency the nickname "currency of the dark web."
But the ingenuity of human mind has made it possible to track bitcoin transactions. Law enforcement now relies on software tools to track bitcoin transactions, according to Bloomberg. Firms such as Chainanalysis are acquiring skills to flag digital hoards linked to crime or money laundering, the publication said.
New Currencies Take Over
To circumvent detection, criminals are now increasingly using other digital currencies such as monero, ethereum and Zcash, Bloomberg said, quoting Europol, the European Union's law enforcement agency.
Monero, which launched in 2014, encrypts the recipient's address on the blockchain and also generates a fake address for the sender to keep information confidential.
Zcash encrypts the sender's address, rather than faking it, making it extremely difficult to uncover the currency's true sender by looking at correlations in addresses used in multiple transactions.
Monero rose from a low of $84.58 on Nov. 3 before ending 2017 at $338.58, a gain of 300 percent over two months, according to Coinmarketcap.com.
Crime And Crypto
A relationship between the proliferation of cryptocurrencies and an increase in crime has not been established.
Voices such as Forbes contributor Jason Bloomber draw a link between the rally in cryptocurrencies and their use among criminals.
"Cryptocurrencies have actually led to a massive cat-and-mouse game with law enforcement, as agencies get better at identifying criminal behavior, while criminals come up with new evasion techniques and increasingly anonymous cybercurrencies in order to defeat the efforts of law enforcement," Bloomberg said in a recent column.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.