Unfortunately you often hear about the hacking of crypto coins. Are you wondering how many offender groups do this, how much a cryptohack produces and how they launder the captured Bitcoins? Then you should certainly read this contribution, because here we explain it.
Which forms of crime are there in crypto?
Just like in every sector, there are also crypto coins for (the trade in) crime. In short, cryptocriminality is divided into two types: cryptoscams and cryptohacks, although we are the first to admit that there is some overlap in both forms of cryptocrime . With cryptoscams you try to set up something with the intention of transferring your crypto coins or real money to the criminals. What a cryptoscam is and how you can prevent it can be read in this article .
The other form is the hacking of cryptocurrences or cryptowallets. With this form of cryptocrime you try to crack the access code to your wallet (private or on the stock market) and the crypto coins without your permission and often even without you knowing it. This article is about this last form of cryptocrime.
This video explains how money laundering works (text continues after the movie)
Who commit hacks of cryptowallets?
Chainalysis is a company that analyzes blockchains, among other things to prevent cryptocrime. They did research into cryptohacks in early 2019. They found that in 2018 two large groups are active that are busy hacking storage places for crypto assets. Of course one does not know who is hiding behind those groups (otherwise they would probably have already been arrested), so they are called ‘Alpha’ and ‘Betha’ for the research. This shows that it is not easy to commit hacks. We assume that the preparations are extensive and probably costly.
How much does hacking yield them?
The revenues are shockingly high. According to the survey, they make an average of $ 90 million per hack. In total, both groups have jointly captured more than $ 1 billion.
How do they channel the proceeds of a cryptohack?
In addition to the preparation of the hack itself, this step probably requires the most preparation. As soon as the crypto coins have been captured, the criminals move them at a furious pace through a number of wallets and scholarships. They hope that because of the many transactions, splits and merges, the origin can no longer be traced. As soon as they think the coins are safe … they stay away from it.
They analyze the media coverage of the hacks and wait for the storm to lie down. Once they have finished, they move the coins for the final phase, after which they convert the coins into other possessions or regular money and thus put the proceeds in their pocket. The research shows that the average time between the hack and the cashing of the crypto coins is about 121 days, while waiting times of 2 years also occur. The chart below shows a number of analyzes of cryptohacks, in which the time between the hack and the cashing of the coins has been reconstructed.
Hackers are getting more and more difficult
The privacy in cryptocurrency can be a problem in the case of a crime to trace the stolen crypto coins. Initiatives like Chainalysis offer a solution here. They work together with large players and (in this case) cryptobeures, such as Binance . By following the money flows immediately after a theft, they can be intercepted more and more often. Binance managed to intercept the stolen coins after the hack at Cryptopia in October 2018. The crypto courses therefore hardly responded to the hack.
South Korean stock exchanges work together after cryptohack
In the meantime, South Korean fairs are even working together to stop suspicious transactions through blockchain tracking, with the support of the regulators, regular banks and the government.
On the other hand, the hackers get a head start to the extent that they know how to exercise more patience. Of course, the increased interception chance here also leads to a cat-and-mouse game where the hackers will undoubtedly try new methods to make the crypto coins disappear from sight without being noticed.