Law enforcement agencies are currently faced by enormous challenges when having to investigate and analyze a cybercrime. Most of these challenges can be attributed to the wide availability of anonymity browsing software and cryptocurrencies. A recently published paper aims at examining how anonymity browsing software, such as Tor, in combination with cryptocurrencies, pose a great challenge during investigation of a cybercrime and how these tools are helping cybercriminals launder money, evade taxes, and distribute ransomware online. The paper aims at raising awareness regarding the issue of anonymity browsing tools, which were namely developed to promote online privacy, yet are currently exploited by cybercriminals in association with cryptocurrencies, such as bitcoin, to engage in illegal activities while evading being monitored and identified by law enforcement agencies.
Accessing the internet is a basic human right:
The internet has become the world’s standard for the transmission and delivery of data. According to the Global Digital Reports’ Suite published in 2018, there are currently more than 4 billion internet users all over the globe, which represents more than 50% of the world’s population. People use the internet for a myriad of tasks that range from accessing social networks and shopping online all the way to purchasing illicit goods via darknet marketplaces such as Dream Market, Wall Street Market, and The Majestic Garden.
With billions of the world’s population relying on the internet for various purposes, many argue that lack of internet connectivity can now be considered as a violation of human rights. Counteracting internet censorship is growing as a global human rights initiative, as the internet is by far the most important ecosystem for speaking one’s mind freely.
Cryptocurrencies and anonymity networks represent cybercriminals’ haven:
With the advent of cryptocurrencies and advancement of online anonymity software, the incidence of cybercrime has been surging during the past few years. In 2017, a report published by Cybersecurity Ventures predicted that by the year 2021, various forms of cybercrimes will result in annual losses of over $6 trillion, which represents a 200% rise from losses reported in 2015.
Technology is offering hackers and cybercriminals more powerful protection against monitoring by law enforcement agencies. They are currently using anonymity network solutions such as Tor, FreeNet, and I2P, which are more effective than previous solutions such as proxy servers and virtual private networks (VPNs).
Moreover, cryptocurrencies are much more difficult to monitor than previously used anonymous payment methods, such as Liberty Reserve and UKash. There are currently hundreds of cryptocurrencies that support pseudo-anonymous transactions. Even though every bitcoin transaction can be associated with a specific address, the sender’s and receiver’s information including name, IP address, and geo-location are hidden. Even more, bitcoin utilizes the Tor network as an added defensive mechanism. Tor based onion services were combined with a core network daemon to be an integral part of Bitcoin’s core project in order to host a Bitcoin node with onion hidden service functionality, thus, boosting network integrity and avoiding unmasking the user’s real node IP address.
The Huobi Research Report, which was established in 2016, in order to analyze the cryptocurrency market, has predicted a 71% rise in cryptocurrency transactions by 2019. With increased popularity of cryptocurrencies, law enforcement agencies and federal regulators are concerned that they are increasingly inviting their usage in illegal activities including money laundering and tax evasion.
Combined usage of cryptocurrencies and the Tor network renders every transaction virtually untraceable. These easy-to-use tools are helping inexperienced computer users turn into tech savvy hackers and cybercriminals. A study published by Bromium, the internet security firm, in 2018, reported that around 8%-10% of illegally generated online profits were successfully laundered by cybercriminals and hackers, which corresponds to $80-$200 billion annually.
One of the main concerns of hackers and cybercriminals to successfully conduct online illegal activities is to remain totally undetected. Cryptocurrency which operates via a pseudo-anonymous ecosystem plays a pivotal role in criminal motivation of individuals seeking to commit online fraud or evade tax payments. Oppositely to the stock market, which is strictly regulated and requires extensive paperwork for the execution of even a single trade, cryptocurrency trading requires only a blockchain based wallet and a cryptocurrency exchange platform. With anonymity enforced via using Tor, profits generated via cryptocurrency trading can be kept hidden from tax authorities, which renders cryptocurrency trading a gold mine for those looking to evade taxes.
Even though most cryptocurrencies are pseudo-anonymous, using them over the Tor network can render them totally anonymous. Tor and crypto represent and unmatchable combination for cybercriminals and hackers who are seeking untraceable means for conducting various forms of online illegal activities.