Wednesday 28 September 2016 4:49 pm

Bitcoin still "currency of choice" for cybercriminals... for now

Bitcoin remains the "currency of choice" for cyber criminals, but they may soon turn to newer digital currencies, Europe's top police agency has said, and even start targeting blockchain, the technology beneath it.

The most well-known cryptocurrency is being used across a range of cybercrimes, including as payment on the darknet, and in DDos, phising and ransomware attacks, extorting money from victims as well as being used as payment for criminal services.

Payment of ransom is "almost exclusively" in bitcoin and even those within the bitcoin community, such as exchanges, are targeted, according to a new report from Europol.

Read more: The US is looking to formalise policy around blockchain technology

The Bitfinex exhange was hacked in August and criminals stole more than $60m from its users in the most high profile bitcoin crime since the Mt Gox heist.

However, the agency warned the creation of new digital currencies which provide greater privacy for users, such as zcash, would become attractive to criminals. 

Zcash is a soon to launch cryptocurrency which will be more anonymous than bitcoin. Its creators say it will give people complete financial privacy, however, critics have raised concerns around its potential to fund black markets.

"It is not hard to imagine who would be the primary benefactors of a currency which was entirely anonymous and resistant to law enforcement surveillance," said the report.

"While Bitcoin is clearly the current currency of choice, regular horizon scanning exercises should be carried out to assess which alternate currencies are either also being abused, or are likely to be abused in the future."

Read more: This consulting firm has created an "editable" blockchain and people are puzzled

The high-profile nature of bitcoin may also be pushing criminals into using other digital currencies, the report noted.

It also warned that while blockchain, the technology underpining bitcoin, was largely free from being abused, it expects the technology to be targeted in future, by criminals' "more creative use of its capabilities".

While financial institutions are increasingly experimenting with blockchain technology, they are largely creating their own permissioned distributed ledgers which have limited access to outsiders rather than using the bitcoin blockchain.

However, the report indicates cybercriminals' persistence in finding new targets.

Read more: On Her Majesty’s secret servers: GCHQ taps startups to fight cyber attacks

Here's what Europol said:

Blockchain technology also attracts considerable interest from industry and academia. It has potential applications for many transactional activities such as voting, identity management, digital assets and stocks, smart contracts, file storage and record keeping, to name just a few.

While there have been previous indications that the blockchain itself could be abused for criminal purpose, such as for storing child abuse images, or malware code, there is little evidence of this currently happening. However, a new variant of the CTB-Locker malware does use the blockchain to deliver decryption keys.  As entrepreneurial cybercriminals become more familiar with blockchain technology and its potential, it can be expected that we will see more creative use of its capabilities.