As new technologies emerge, so do criminals looking to exploit those innovations. This is the case with many virtual currencies that have risen to popularity within the past few years and have made headlines in the past few months. The virtual currency market was valued at $47.5 billion in 2012, and has been growing since. Virtual currencies — monetary systems not tied to traditional currencies and managed through the Internet — free users from some restraints of normal credit and debit card purchases, and can be used anonymously. However, it is this user anonymity that makes these services attractive to cybercriminals.
Money laundering through digital currencies is popular in the cybercrime world. The now defunct Liberty Reserve digital currency service was used to launder about $6 billion, which has been marked as history’s largest international money-laundering prosecution. Even though it no longer exists, other virtual currencies have cropped up that cybercriminals are using for various money laundering schemes.
Through the anonymity network Tor, cybercriminals have the ability to access the Deep Web and virtual currencies relatively unseen. Silk Road, one of the more popular underground destinations, was an online market that only accepted the virtual currency Bitcoin. Similar to Craigslist or eBay, users could buy or sell more than 200 different categories of goods. However, Silk Road was primarily used as a drug market and for other illegal services. The FBI put an end to Silk Road, but other sites emulating the original model are still in service. Some sites on the Deep Web that cater to cybercrime include services to purchase credit cards, weapons, false legal paperwork, and other illegal activities.
While there are negative effects of virtual currencies, it is not anticipated to fade away anytime soon. In fact, the Yankee Group predicted that these currencies will have a value of about $55.4 billion by 2017. Below are a few recent highlights from the virtual currency world: