Bitcoin boom is a 'gold rush' for cybercriminals
Criminals were early adopters of cryptocurrencies - and now they are taking advantage of their expertise to con the public.
Thursday 1 February 2018 14:06, UK
The new "gold rush" in cryptocurrencies is being exploited by professional cybercriminals who are making large amounts of money on the back of them, according to a new report.
Digital Shadows, a threat intelligence company, has reported that there are more than 1,440 cryptocurrencies in circulation, with new alternative coins emerging every week.
Highlighting a number of attacks that interested investors should protect themselves against, the company said: "Cybercriminals have developed several schemes to defraud those looking to profit from the growth in cryptocurrencies."
Becky Pinkard, the vice president for IT and intelligence at the company, told Sky News her team first began monitoring cryptocurrencies because they were being used as a means of exchange by cybercriminals.
This early adoption by the criminal market has meant people with malicious intentions have developed an expertise in cryptocurrencies that they've been able to take advantage of when seeking to con members of the public.
"Cybercriminals follow the money and right now they see in the unregulated and largely unsecure world of digital currencies a huge opportunity to target people, businesses and exchanges and make money quickly and easily," said Rick Holland, vice president for strategy at Digital Shadows.
Hackers have targeted cryptocurrency exchanges, with government-sponsored attackers in North Korea believed to be responsible for a number of cyber heists as the nation attempts to deal with sanctions.
Mr Holland added: "In many ways its like the gold rush of the 1840s as people flood to the opportunity cryptocurrencies present and are preyed on by criminals and the unscrupulous."
Attackers are often using other people's computers to mine cryptocurrencies - mining essentially being a computational process which can reward a user with more of the currency by making them process transactions.
The two main ways that criminals are fraudulently mining cryptocurrencies involve them either developing a botnet - a network of "slave" computers which the attacker controls after infecting them with malware - or though "cryptojacking" in which computers mine cryptocurrencies secretly using web browsers or other applications.
Fears are also mounting regarding whether attackers are artificially inflating the prices of cryptocurrencies and then dumping the stock, just as traders do illegally in the real world.
Fake "initial coin offerings" are also a common scam which people might fall victim to. A crypto start-up called Prodeum recently vanishing with investors' money, leaving only a white web page featuring the word "penis".
Ms Pinkard advised consumers: "Do your homework. Don't just rush out there and buy some Bitcoin because you're looking at the price right now.
"There's a lot of knowledge out there, and if you don't take the time to expose yourself to it, you're just going to end up losing your money."