Cryptocurrency Theft Lawsuits Diminish amid Rise in Cybercrime (2024)

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Cryptocurrency Theft Lawsuits Diminish amid Rise in Cybercrime? ›

Cryptocurrency Theft Lawsuits Diminish amid Rise in Cybercrime. In the aftermath of digital heists, legal relief remains scarce for victims suing cryptocurrency platforms and mobile service providers accused of inadequately safeguarding users' assets, including crypto wallets and phone numbers.

Cryptocurrencies, by design, offer anonymity attractive to those wishing to keep their financial activities private. However, this anonymity also provides a cover for cybercriminals, allowing them to execute fraudulent schemes, from ransomware to identity theft, with a reduced risk of detection.

Cybercriminals have found many ways to use cryptocurrencies for their benefit. One of the most common ways is through ransomware attacks. In a ransomware attack, a cybercriminal will gain access to a victim's computer and encrypt their files, making them inaccessible.

This can happen by hacking into someone's digital wallet, tricking them into revealing their credentials, or scamming them into a fraudulent transaction. One of the most common crypto hacks occurs when a crook infects someone's device with a keylogger.

As we revealed in last year's Crypto Crime Report, 2022 was the biggest year ever for crypto theft with $3.7 billion stolen. In 2023, however, funds stolen decreased by approximately 54.3% to $1.7 billion, though the number of individual hacking incidents actually grew, from 219 in 2022 to 231 in 2023.

Cryptocurrency is a digital or virtual currency relying on cryptography and complete decentralization as security measures. It operates independently from any country or bank and often even from its creators. All transactions and proof of ownership are distributed across a blockchain digital ledger.

Cryptocurrencies are known for their market volatility so the value of investor's assets go up and down quickly. As more people have invested their money in cryptocurrencies, criminals have capitalised on this as an opportunity to commit fraud.

Bulk phishing, smishing, and business e-mail compromise (BEC) are the most common types. In 2022, 85 percent of the surveyed worldwide organizations reported encountering bulk phishing attacks, while roughly three in four were targeted by smishing scams.

Mt. Gox remains the greatest cryptocurrency robbery in history, with over 850k Bitcoin stolen between 2011 and 2014. Mt. Gox claimed that a fault that caused the loss is due to an underlying bug in Bitcoin, known as transaction malleability.

Who to contact for crypto scammer? ›

If you believe you or someone you know may be a victim of a cryptocurrency scam, immediately submit a report to the FBI Internet Crime Complaint Center (IC3) at www.ic3.gov or contact your local FBI Field Office and provide as much transaction information as possible.

To sustain a conviction for securities fraud, the federal government need only show the defendant had a reckless disregard for the truthfulness or untruthfulness of their conduct. Defendants convicted under §78ff, face penalties of up to 20 years in prison, fines up to $5,000,000, or both.

In several well-publicized cases, hackers have burglarized cryptocurrency exchanges. In one instance, thieves reportedly stole over $400 million of cryptocurrency. Cybercriminals can be prosecuted for cryptocurrency fraud, computer crimes, and other offenses.

The FBI warns Americans against using cryptocurrency money transmitting services that are not registered as Money Services Businesses ( MSB ) according to United States federal law ( 31 U.S.C. § 5330 ; 31 CFR §§ 1010; 1022 ) and do not adhere to anti-money laundering requirements.

If they find a Bitcoin transaction related to a crime, they can work with the FBI to track some crypto funds internationally. Besides analyzing available data, authorities can also request information from centralized exchanges. As a rule, exchanges are obligated to share that information.

Yes, it is possible for stolen Bitcoins to be traced back to the owner. Bitcoin transactions are recorded on a public ledger called the blockchain, which allows anyone to view the history of transactions associated with a particular Bitcoin address.

The use of cryptocurrency mixers (or tumblers) is a common obfuscation technique for criminals who want to conceal illicit transactions. These services enhance transaction privacy by breaking the links between the original and the final address using several intermediary wallets, charging a transaction fee.

Cryptocurrency transactions can be conducted without revealing personal information, making it challenging for law enforcement to trace individuals. This anonymity can protect the privacy of legitimate users but may also be exploited by criminals.

A cryptocurrency is a digital currency, which is an alternative form of payment created using encryption algorithms. The use of encryption technologies means that cryptocurrencies function both as a currency and as a virtual accounting system.

Cryptography and Communications involves protecting information, either communicated internally or exchanged with individuals or other organisations, against accidental exposure and malicious attacks. As a Cryptographer, you may: design security protocols, including key management rules.