The cryptocurrency boom is at an all-time high. If you’re not familiar with the word, you’ve probably heard about the most ubiquitous cryptocurrency: Bitcoin.
Trading Bitcoins has become a way for many people to invest or make fortunes of all sizes.
When it entered the picture more than 10 years ago, the purpose for Crypto was that people worldwide might use it as a tool to escape monetary repression, inflation, or capital controls. The reality is that it is also used in Ponzi schemes, scams, or even as a device for money laundering.
We’ll take a look at examples where Crypto’s bad reputation is a warrant.
Would you like to listen instead of reading? Just play our Podcast Episode
Cryptocurrency used as a Scam tool.
#1. FaZe Clan
The crypto topic, in general, is a roller coaster for the entire world, whether it’s like manipulation of the coins, long-term investment opportunities, or short-term investment opportunities.
There’s this group called the Faze Clan, which has been around for a while, and they do competitive video gaming.
Long story short, E-sports organization Faze Clan has kicked out one member and suspended three more after a cryptocurrency push. The members were involved in what some have been labeling a scam.
These individuals that play the games are popular, and they have a vast social media following. A vast fraud just broke out where these guys were pushing these coins.
They forgot the concept of what a wallet is and how it’s public on their transactions. And they use their platform to push a currency, a cryptocurrency, to get tons of people to buy in.
Then they would be the early adopters, and right before the initial coin offering, they would dump all their coins like three hours before. – So, they just got out in this massive fraud.
In other words, those who purchased the coin found themselves losing lots of money as the value plummeted. The fraud occurs when investors sell their tokens as soon as they gain value. This mass cash out is called “pumping and dumping” and leaves new investors caught up with considerable losses.
This is unfortunate for the good cryptocurrency markets out there and the good coins doing it for the right reasons.
Overall, it’ll be interesting to see where this leads up.
For instance, the US government just recently mentioned, they’re going to try to do a US official cryptocurrency of some sort.
… There’re also times where Criminal groups use Crypto during ransomware attacks:
#2. Bitcoin used by Criminal Groups during Ransomware Attacks.
The bottom line is that Criminal groups are heavily using Crypto to receive money for their operations.
A ransomware attack is where a criminal comes into your network. They hack you; they control all your assets. They may be encrypting everything and making it inaccessible to you.
And then they say, “Hey, if you want to play ball, you owe me some money.”
Most of the time, these criminals ask for Bitcoin. They say, “We want Bitcoin. Here’s how much we want of it. Um, and oh, by the way, if you don’t pay me, not only do you not get your data back, but we’re going to leak your data.”
It is not clear if the value of Bitcoin –or Cryptocurrencies in general– will keep rising or if it will become a viable tender soon, but what is clear is that it’s a new payment network that has changed the world forever.
As we ponder if all of this is good or bad, we can see the case of Venezuela.
It’s a perfect example, albeit extreme, of what Crypto was made for and what it is capable of.
Bitcoin and the Case of Venezuela: A tool against government regulation and why that’s a good thing.
Brief context about Venezuela’s inflation
Venezuela is a communist country.
The country is under the regime of Nicolas Maduro and beforehand was Hugo Chavez, so the government started back when we all were young.
The government started by taking firearms from its citizens. It started making business regulations. Just controlling what the businesses could drive and could not make.
Venezuela was closed down. The government started regulating TV and what people could watch.
You could either be going to watch the president or going to watch something relating to the president. Fast forward all these years, right now, Venezuela is the country with the highest inflation in the world.
People grab bags, large trash bags of their currency, and burn them for fire because the fire is worth more than what the currency’s worth.
It’s a country that operates solely off dollars, US dollars. The average monthly revenue for any given person is about 20 to $30 a month.
The average burger in Venezuela, it’s about $20 a month. So, inflation is ridiculous. People are hungry; people are dying, there’s no medicine, all the good doctors have left the country, gone to Spain, gone elsewhere.
Venezuela is a country where there’s no growth; there’s no future for anyone.
People there have experienced the government coming in through their house, stealing items, stealing property.
It is standard for you to have a business or a farm, and the government comes in and says, thank you, goodbye.
They kick you out with their firepower and intimidation strategy. So that’s the current state of the country. It was in the top five economies back in the nineties globally, and it has beautiful landmarks, beautiful beaches, and a significant oil reserve. But now, the situation is sad.
Cryptocurrency as a solution in Venezuela
The bar is worth zero, so people must find other means.
Cryptocurrency is a great solution because you can get it if you have internet connectivity somehow. They’ve now implemented a particular security system rule not to allow their citizens to engage in some cryptocurrency as their government has their own.
However, Bitcoin was a great outlet a few years back when it began because people could exchange cryptocurrency for goods.
They could also buy things internationally as they couldn’t find items inside the country.
If you want to get anything, you must have somebody in on, like the TSA side of the house, to let your bags go through without it being damaged and stolen and all of that.
So, cryptocurrency was an excellent solution for that. Families still use it to pay for online services and online goods.
It’s a bit more complex for the government to regulate Bitcoin, but they still extensively operate off the US dollar. So, which again makes it exceedingly difficult for anyone to survive.
Bitcoin taking on the Cash Problem
People walk around with wads of cash if you have it. And that’s how they pay.
They have multiple checkpoints on the roads, and at every checkpoint, you have to give like $20 to the guards. If you don’t, they will take you.
It’s like standard practice. You get stopped, you pay them US dollars, and you can keep moving if you don’t; they take you.
So, it’s all US dollars cash. You have people here in the United States that have bank accounts and have dual citizenship.
So, some people can move the money in and out if somebody gives cash over there. Then somebody sends a transaction here, whether it’s Zale quick pay or cryptocurrency.
Finding different means of moving US dollars from a transactional perspective is a challenge. But there are plenty of people now that because this is the way of operating, everyone’s giving cash, sending money here, which plays into taxes quite interestingly.
That sounds super complex, at least the cash-based system.
Using cryptocurrency is a little bit easier, and it has the consistency of popularity.
And what I mean by that is when the cone is doing well, and everybody’s using it, then you’ll have actual citizens using it.
Let’s say you want to buy a cell phone. Okay. You know, Crypto is doing well. You can pay me in Crypto, or you can pay me in us dollars cash. They prefer the US dollars cash, but not many people can walk around with tons of money anywhere because, again, someone will stop them.
So, in other words, it’s okay to say that Bitcoin is the preferred digital coin used by people in Venezuela due to its popularity. Also, when things happen at an international level, such as the case of El Salvador and its announcement of using Bitcoin as an official tender, people keep the popularity of Bitcoin rising.
So then is, is mining Bitcoin in Venezuela still illegal now?
Yes, because they have their coin – the Pado.
The government is making it even more difficult because now they’re controlling the internet, right?
Like other nations, they’re the firewalls. And some of their espionage against their citizens in more advanced ways.
For example, if you want to go to the American Airlines website, they’re starting to regulate some of the internet conductivity period and things like that. Popular applications like WhatsApp and Facebook, et cetera are beginning to get similar limitations.
So now, when people are starting to mind Crypto in Venezuela, it’s a huge technical hurdle to just even network properly.
For you to mind the cryptocurrency into the network. Therefore, a lot of people have pretty much stopped doing it.
The internet is wired. Citizens are being spied on. So, it’s becoming such a communist country as we know it.
Ransomware Attacks Will Occur with or Without Crypto
Many people keep saying that we need to regulate cryptocurrency because it is the root of ransomware attacks.
We all must remember that criminals will get paid no matter what.
A lot of criminals get paid through US dollars. If cryptocurrency didn’t exist, that would still get paid through our dollars.
They’ve been watching US dollars for years. This new concept of cryptocurrency is not enabling criminals. It’s just another tender; it’s a more flexible tender.
But as an incident responder, as a cybersecurity professional, professionals follow the cryptocurrency market.
They follow how much it’s worth, the technology behind it because certain criminal groups make a mistake, and it’s possible to trace their crypto quote Wallets from where they’re coming from.
A public ledger, it’s there, anybody, anybody can see it.
And not just what you’re sending who you are, etcetera, but also basic networking.
Like what IP address you are coming from, what time of the day you received the transaction, or what time you sent that transaction. There are many different nuances to tracing or tracking the cryptocurrency movement from the net.
Is Crypto Good or Bad?
For any companies out there reading, if you or your team cannot have a Bitcoin wallet or reserve in case of an event, make sure that your incident response team or your insurance might have some kitty that then you can go play out.
As cybersecurity leaders or just leaders that happen to operate in cybersecurity, people see Bitcoin and cryptocurrency in the shade, in the dark, because it is used for terrible things. Still, you have to turn your hat around and make sure that you can then use cryptocurrency to go by your family medical supplies that they need to survive in Venezuela – For example.
So with that dichotomy of thought, it is a currency it’s not, it’s not good, and it’s not bad.
Overall, cryptocurrency is the right way to go.
There are just so many different use cases to leverage cryptocurrency.
When you look at the gold industry as an example, you know, those are things that have come up and down in the past. Cryptocurrency will eventually end up within that same space.
Just like anything, it’s a little bit scary at first when you’re not too familiar with it, but once you do, you’ll see the benefits and how it just makes it easier for us to exchange goods.