Bitcoin has always been used by people involved in various black market activities. In fact, so many users first interacted with this cryptocurrency as they saw it as an option to buy something that was illegal. Obviously, most of the online black markets were shut down but this does not mean cybercriminals do not still know ways to use cryptocurrencies for transactions.
BTC was promoted as an anonymous and private currency of the online world. However, Bitcoin network transactions are actually public. There are no real-world identities that are attached to the transactions but you can download blockchain data that includes every single cryptocurrency transaction.
Thanks to new innovations like the very popular Lightning Network or wallets that are privacy-focused, you get more privacy. However, this does not mean the transactions are private.
Even with the privacy aspect in place, Bitcoin still stands out as the preferred cryptocurrency of cybercriminals. This statement is based on the IOCTA yearly report from Europol. Various altcoins (Monero as the best example) gained traction as they offer more privacy but they simply cannot compete with BTC when it comes to familiarity, brand recognition and network effects. The report from Europol states:
“Bitcoin remains the most frequently used currency, believed to be a consequence of familiarity within the customer base.”
When it comes to the darknet alone, The Block showed that the BTC acceptance rate is 91%.
Bitcoin Used By Cybercriminals
The Europol report shows us that cryptocurrencies are really important for the underground economy and that they are utilized for most of the C2C (criminal-to-criminal) payments done online. Some examples where cryptocurrencies are almost always used include DDoS extortion, darknet markets, cryptojacking and ransomware.
It was also shown that the criminals now move away from the traditional payment options and embrace Bitcoin more than in the past. Many beginners do not actually know that the blockchain transactions are completely irreversible. Anyone can take advantage of this.
We now know that there is a decline in how many darknet market transactions make up bitcoin transactions. Even so, if we look at dollar value, it still grows in darknet commerce.
The Use Of Monero
When we look at the Europol report, we also see the mention of Monero. This is because it is highly used for cryptojecking, which is where the hacker places cryptocurrency mining software on the computer of a victim. Monero is great for this because of its high privacy and the fact that you can use conventional hardware to mine this altcoin.
So how much Monero adoption is in place among cybercriminals? Europol’s report says the following:
“While we have previously reported a small shift towards more privacy-focused cryptocurrencies such as Monero, Bitcoin still remains the currency of choice for both legitimate and criminal use. The main development regarding this trend are on the Darknet markets, several of which also accept Monero, or in some cases exclusively trade in it.”
The Rise Of Criminal Exchanges
The last thing that should be mentioned about the Europol report is that bitcoin exchanges are now forced to collect user information. This is due to AML and KYC laws. This is why cryptocurrency users that want to remain private will most likely move to systems built around peer-to-peer exchange.
It is stated that:
“It is likely we will see the rise of criminal exchange services operating on the digital underground, exchanging fiat and cryptocurrencies outside the regulated sector.”
Law enforcement can easily make it difficult for the criminals that want to use BTC for activities that are unregulated. All criminal activity cannot be stopped in the online world.