Cryptocurrency Security Challenges
By Brent Barker
Criminals are early adopters of new technology. They use it to create new crimes and improve old crimes. Law enforcement and the laws are always playing catch-up. This is especially true for cryptocurrencies.
In 2017 the value of cryptocurrencies exploded. At its high, they had a total value of $823 billion USD. The rising value attracted investors and criminals. Bitcoin was the first cryptocurrency but now there are over 1,600. Most are legitimate, but some are scams. One cryptocurrency was even called ponzicoin.
The single largest theft of cryptocurrencies took place in January 2018. Hackers stole $530 million from the cryptocurrency exchange Coincheck. Several people who became rich from cryptocurrencies have been kidnapped and forced to hand over the private key that accesses their cryptocurrencies. Once someone has your private key and steals your cryptocurrency, it is gone. There is no way to get it back.
Countries are using cryptocurrencies. Venezuela introduced the petro earlier this year to avoid U.S. sanctions. And North Korea is suspected of secretly mining cryptocurrencies to earn hard cash.
Companies are using cryptocurrencies as a new way to raise investment money. Most are legitimate, but one study found that over 18% of them were suspicious and likely involved fraud.
But there is good news. Cryptocurrency transactions are not as anonymous as previously believed. They can be tracked, and owners identified. Law enforcement is learning how to “follow the virtual money.”
Today, the attention is on the cryptocurrencies, but many see the greatest potential from blockchains, the software that powers cryptocurrencies. Many believe blockchains could change the world as much as the internet. In the future, every business will use blockchains in some manner including the security industry.
Join me on September 24th at GSX 2018 as I explore the criminal use of cryptocurrencies, law enforcement investigations and examine the enormous potential of blockchains to fight crime in the future. Join me for Session #4309, Bitcoins, Blockchains and Crime.