From prepaid cards to bitcoin: How did ransomware hackers adopt cryptocurrencies?

Abstract

I explore how criminals use cryptocurrencies in ransomware operations and leverage the vulnerability of virtual currencies to evade legal restrictions and international scrutiny. I do so by examining three drivers of the ‘merger’ between ransomware and cryptocurrency. First, criminal groups have embraced cutting-edge technologies to make their attacks more effective and maximise benefits that cryptocurrency presents, which include the convenience of fast payment and money laundering and the ease of hacking the currencies themselves. Second, ransomware groups have exploited the legal vacuum in the widespread use of rapidly circulating monetary instruments. Finally, groups have adopted cryptocurrencies because states – primary regulators of international financial transactions – remain in such disagreement over the control of digital activities that they have failed to address problems associated with them. In sum, this article presents a set of technical, legal and political reasons why groups have incorporated crypto in their operations.