As the year comes to a close, Hard Fork put out an article today that talks about some of the most extreme cons pulled off by malicious actors in the cryptocurrency world.
The list shows some hints of why governments and public officials are reluctant to allow blockchain to become the norm, fearful that the instabilities and gray areas inherent in these financial systems could cause dangers to blossom on the horizon.
First, notably, Hard Fork’s list does not mention cryptojacking, commonly considered one of the most widespread cryptocurrency fraud trends over the past year. Cryptojacking is also insidious because of its inconspicuous nature – users often don’t see these programs running in the background, taking small amounts of processing power to mine Bitcoin (or other coins) for their overlords.
The survey does mention companies that have simply defrauded utilities by running up huge electric bills in the mining of Bitcoin or other cryptocurrencies, and then skipping town. Writer David Canellis notes that in one case a company paid its rents, but stopped paying its utilities, which seems like a deliberate play to stick the energy company with the bill.
Another big one mentioned in the Hard Fork piece is the tying of cryptocurrencies to ransomware schemes.
If you’re going to ask for a ransom anonymously, why not ask for the ransom to be paid in a currency that is hard to track? That’s the idea behind the use of cryptocurrencies in ransomware operations. But criminals have now taken it a step further with Ransomware-as-a-service schemes and an affiliate program outlined in the piece that shows how these types of replicating fraud programs work.
As you may or may not expect, some of the other schemes were much less sophisticated, as when a pair of criminals lured a Bitcoin holder to France and promised him stacks of physical euros in exchange for BB bitcoin. Spoiler alert: the paper money was fake.
What does this have to do with cryptocurrency markets? In general, the crypto community is trying to close a lot of these loopholes and address many of these vulnerabilities. They’re trying to make fraud and cybercrime less rampant in the cryptocurrency universe. For example, the blockchain has been very much applauded by some parties as a force against money laundering, but when you see countries or criminal groups laundering money with cryptocurrencies, it tends to undercut that argument.
To understand what we’re in for in the cryptocurrency market in 2019, keep an eye on cryptocurrency security news. Understand what the biggest threats are, and how security teams are dealing with them proactively, rather than allowing fraud and instability to fester in blockchain systems.