By Jill Bright | Guest Author Diana Hoffman | Chicago Title
Cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.
Cryptocurrency leverages a technology called blockchain. A blockchain is a ledger that keeps track of cryptocurrency transactions. It is maintained across computers that are linked through a distributed network, rather than one central authority. Transactions are logged into a blockchain that protects the currency from being counterfeited and prevents transactions from being duplicated.
The blocks that make up the chain log in each transaction link together, making up a historical record or ledger. These virtual exchanges are difficult for law enforcement — or anyone else — to track. This can make it difficult to unveil the threat actors who demand payments in the form of cryptocurrency for a ransomware attack.
There are many types of cryptocurrencies, all with their own blockchains. The first — and most commonly used — is Bitcoin, which is open source. No one person, entity or regulator owns or controls bitcoin. Anyone and everyone can own and transfer in bitcoin.
Ether is the second most common cryptocurrency, according to law enforcement. Their online community is Ethereum, which touts as having built a booming digital economy and method for other creators to earn currency virtually. It is also available to anyone, anywhere in the world.
The U.S. Department of Justice has a National Cryptocurrency Enforcement Team (NCET). This team investigates illegal activities that utilize cryptocurrency to perpetrate their crimes. Ransomware is one of their focuses since the hackers demand the ransom be paid in cryptocurrency.
The NCET continues to hone its skills and develop ways to track the payments (depending on the type of cryptocurrency being used) to identify the perpetrator. In some cases, they can catch criminals when they cash in their cryptocurrency through exchanges.
The establishment of the NCET demonstrates the seriousness of these crimes and how they threaten our economy. In addition, new or added regulations are being proposed throughout all branches of the U.S. Government.
Article provided by contributing author:
Diana Hoffman, Corporate Escrow Administrator
FNTG/National Escrow Administration