Cryptocurrency Crimes Surge As Industry Strives for Greater Adoption

cryptocurrency crimes

The surge in cryptocurrency crimes has been a disquieting phenomenon to the industry.

A man from the Siberian city of Kurgan is facing criminal charges for mining bitcoins through a government-owned server he hacked.

The 21 year old Russian was arrested after investigators discovered three administration servers that were hacked in three regions.

A local media outlet Ura.Ru reported that investigators moved in on the man after internal security division of the city of Yaroslavl noticed that the intruder was attempting to hack their server.

cryptocurrency crimesCiting the regional office of the Federal Security Service (FSB), the media stated that the man under arrest was charged for bridging the network defense of a system of computers for “self interest”.

According to Russian law, the charge carries a sentence of up to 5 years imprisonment if he is convicted.

Crimes Related to Cryptocurrencies More Common

Cryptocurrency mining offenses are increasingly common as people are becoming aware of the value of digital currencies such as Bitcoin. This awareness has led to crimes hitherto uncommon such as electricity theft and commandeering of computer hashpower for mining purposes.

Months ago, some Russian engineers attached to a nuclear power station were arrested for connecting a supercomputer that may have had classified data to the internet.

In South Korea, the police arrested some miners who used chicken farming as a front to obtain low energy bills just to mine Bitcoin.

What should be made clear is that mining of digital currencies is not a crime in any of these countries. The crimes are what the people did for mining to take place.

Worker in a Ukrainian city council office were arrested for using city computers and electricity for mining activities, just as some police officers attached with the IT department of the police department in the country were also detained for similar offense.

In New York, local authorities have ordered some miners to cease operation after receiving complaints from residents of excessive use of cheap electricity.

Stealing Hashpower to Mine

cryptocurrency crimesAside crimes associated with theft of electricity and hashpower, cryptojacking has been a source of concern especially to the cryptocurrency community. Discreet, detection and arrest of culprits is rarer though the crime is no less severe.

In cryptojacking, the hackers install malicious mining codes to devices unbeknownst to the owners. The installed mining script mines the digital currency for the hacker at the expense of the lifespan of the device.

The hazard is mainly from the work done by the device. Mining activity is energy intensive and results in generation of energy in the form of heat.

This is why mining farms spend substantial amount of funds on their cooling systems.

Cryptojackers have shown more interest in the so-called privacy coins such as Monero and Zcash. This is because of the difficulty in detecting transactions made with these coins.

The situation has been so dire that it was reported early this year that thousands of routers sold in Brazil had these scripts installed in them.

Monero Community Took Action

The Monero community has not been passive about this concern. The community launched a malware response workgroup to counter the activities of cryptojacking and its adverse effect on the crypto industry.

A post from the group expressed the situation by stating,

“While the clear majority of users take advantage of these features for good, some attackers use Monero to earn money from machines without users’ consent. They may run miners on webpages that activate without a user’s consent. They may infect machines or hide it in other packages and run mining software. They may infect machines, encrypt the local files, and demand a ransom payment in Monero.”

The move by the Monero Workgroup is timely. The crypto industry has been striving for recognition and mainstream adoption, especially from institutional establishment. It is a known fact that criminal activities within the industry would act as a put-off to those entities that are traditionally risk averse.

Scam ICOs Are Prevalent

cryptocurrency crimesAnother area where criminal activities have been rife is initial coin offerings. This fundraising method in which entities invite investors to purchase their tokens (coins) has been one of the most abused by scammers.

Available data from the cryptocurrency advisory firm, Satis Group states that 80 percent of all ICOs conducted in 2017 were scams. considering that this was a period  in which awareness of cryptocurrencies was  not as high as at present, we can infer that there are more scam ICOs launched these days.

Cryptoinfowatch has been working on several investigative reviews to spot these scam ICOs before they wreck much havoc on investors. At present rate, the challenge is quite daunting but the reward is in spotting scams early.

 

 

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Author: Jofor Humani

Peddling words has been a passion beneath the surface. I speak less than I write...naturally. Aside speaking and writing, I walk too...good for your heart they say. I sometimes do not feel like writing. Then I enjoy quiet times which I use to think and stay with family.

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