An Anatomy of Crypto-Enabled Cybercrimes

Lin Cong, Campbell Harvey (), Daniel Rabetti and Zong-Yu Wu

No 30834, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: While the advent of cryptocurrencies and digital assets holds promise for improving and disrupting financial systems by offering cheap, quick, and secure transfer of value, it also opens up new payment channels for cybercrimes. A prerequisite to solving a problem is understanding the nature of the problem. Assembling a diverse set of public, proprietary, and hand-collected data, including dark web conversations in Russian, we conduct the first detailed anatomy of crypto-enabled cybercrimes and highlight relevant economic issues. Our analyses reveal that a few organized ransomware gangs dominate the space and have evolved into sophisticated corporate-like operations with physical offices, franchising, and affiliation programs. Their techniques have also become more aggressive over time, entailing multiple layers of extortion and reputation management. Blanket restrictions on cryptocurrency usage may prove ineffective in tackling crypto-enabled cybercrime and hinder innovations. Instead, blockchain transparency and digital footprints enable effective forensics for tracking, monitoring, and shutting down dominant cybercriminal organizations.

JEL-codes: H56 K24 O30 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-cis and nep-pay
Note: AP CF IFM PR
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Citations: View citations in EconPapers (2)

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