Cyber Crime and Cyber Terrorism

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Future developments
On the other hand, those currencies are still young in existence and regulation 
on the legality of use is uncertain (and future of cashing out real money). A second 
point, the concept of peer-2-peer networks, renders the anonymity of a wallet's owner 
fairly limited. In order to make the currency work, and since there is no central point 
of validation, all transactions are rendered public in order for each node to know 
what is the balance of a wallet at any time and which transactions have been per-
formed by the wallet owner.
To receive and/or send virtual money a user has transaction address(es). So, as 
soon as a transaction address owner has been identified all transactions made by that 
person with that transaction address are known by the whole network. Obviously, 
to remain anonymous users tend to change transaction address frequently. Digital 
currencies are also highly volatile, so between the times a person injects money into 
the system and another individual cashes it out, the loss might be quite significant.
However, it seems that criminals find this type of currency extremely practi-
cal/attractive and are using it more and more. For instance, the take down of the 
underground criminal marketplace SilkRoad led to the seizure of 175.000 Bitcoins 
(valued $33 million at the time) by the FBI. In May 2013, the take down of Liberty 
Reserve, the oldest and largest digital currency service was proven to have benefited 
largely criminal activities by providing money laundering to an amount of 4.4 billon 
€
($6 billon).
Another advantage for terrorists is the possibility of switching between virtual 
currencies (such as Litecoin, Peercoin or Namecoin to name a few others) in or-
der to better cover their tracks. The task of investigating and tracking transactions 
is becoming complex since today there are already around 70 crypto currencies 
(
Coinmarketcap.com
).
This type of currency is so attractive that criminals started to develop malware 
and botnets that are scanning target's computers for wallets in order to steal its con-
tent and also to use their targets' processing power to “mine” (namely generate) digi-
tal currency.
Despite those drawbacks, crypto currency will certainly be attractive to ter-
rorist networks to transfer large amounts of money from one party to another 
whilst keeping a low profile. There are multiple ways of cashing-in (from real-to-
virtual) and they can be done anonymously. For instance by using Western Union, 
MoneyGram via a platform like CoinMama (
coinmarketcap.com
) or by directly 
purchasing virtual money from person-to-person in a proximity area, for instance 
on 
LocalBitoins.com
.
Similar to cashing-out, 
Localbitcoins.com
 also sell virtual money to a physical 
person directly in exchange of real money. It is the easiest way but not very conve-
nient for large amounts. An alternative is to use a one-shot mule(s) to cash-out money 
from an official exchange such as VirCurEx. Either way, crypto currencies are open-
ing new ground for criminals and terrorists to cash-out legal tender anonymously.
Lastly, undoubtedly after the Edward Snowden revelations (2013) and PRISM, 
it is very likely that the systems mentioned above will seek to evolve and implement 
even more privacy, and that in turn will obviously benefit its users—some of who are 
criminals and terrorist.

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