Illinois-based intelligence analyst and vice president of threat intelligence firm ThreatSTOP John Bambenek, speaking at the AusCERT computer security conference in Gold Coast, Australia, called cryptocurrency a “goldmine for open source intelligence.” The expert, who is also investigating Russia’s role in the 2016 US presidential elections, said that these coins had become a favored method of payment among cybercriminals.
Bitcoin and the Rise of Cybercriminal Activities
“I’m not saying everyone who uses Bitcoin is a criminal, but all criminals are using Bitcoin and cryptocurrency. So as an intelligence analyst, it’s like fishing in a pond with unlimited fish,” Bambenek stated.
He said that the people who want to bypass the traditional banking methods often indulge in these payments. Apart from being the breeding ground for fraud and illicit activities, the currency has given rise to another, more dangerous form of activity – supremacist funding.
Following the violent clashes in Charlottesville in August 2017, the white supremacists have been funding their operations through virtual currencies.
“In essence, a little less than a million dollars. They have real wealth.”
The clashes shook the entire nation and created the ground for Neo-Nazi propaganda that was linked with cryptocurrencies on a vast and alarming level.
Distinction Between Anonymity and Privacy
However, Bambenek believes that Bitcoin is not as anonymous as it appears. He said that in certain conditions, it is easier to track Bitcoin transactions than traditional banking payments.
He further explained:
“The inherent weakness of cryptocurrency isn’t the algorithm, blockchain technology or peer-to-peer. It’s the place where you can turn it into money and vice versa.”
Not all people transacting in Bitcoin, even those who are using this currency for illegal activities or for spreading toxic political propaganda, have the basic knowledge of privacy.
According to him:
“There is a difference between anonymity and privacy that most people don’t really grasp. Even in our community, we gloss over the nuance between the two.”
Bitcoins let you send value anonymously through a blockchain. To do this, you use a public key and a private key stored in a wallet that has a 32-character alphanumeric value. To gain more privacy in this network, sophisticated users obscure transactions and pass them through circuitously placed wallet addresses. This makes tracing of the funds very difficult.
An average user, regardless of his intent, does not even know that he can have multiple wallets and can obscure his transactions. He may not even store his coins in a secure address. An analyst could attribute all transactions made by a person throughout their lifetime. It is exactly like using a bank account. The expert also detailed how he found out the private key to a wallet that was valued at over $17 million at the time.
The Leaky Bits of the Virtual World
As most users are barely tech educated, they have no idea how exactly to use their money. The weak point in the entire ecosystem is the crypto exchange.
“The number of places that you can turn that [virtual] money into something else is radically small, which gives us a lot of opportunity to gather intelligence either by legal process or some other means.”
It could be possible to create a global database from where these illegal transactions could be traced, and criminals could be stopped. However, that would need governmental determination and cybersecurity experts working together for a safer future.