Alex Groce, Josselin Feist, Gustavo Grieco, Michael D. Colburn
An important problem in smart contract security is understanding the\nlikelihood and criticality of discovered, or potential, weaknesses in\ncontracts. In this paper we provide a summary of Ethereum smart contract audits\nperformed for 23 professional stakeholders, avoiding the common problem of\nreporting issues mostly prevalent in low-quality contracts. These audits were\nperformed at a leading company in blockchain security, using both open-source\nand proprietary tools, as well as human code analysis performed by professional\nsecurity engineers. We categorize 246 individual defects, making it possible to\ncompare the severity and frequency of different vulnerability types, compare\nsmart contract and non-smart contract flaws, and to estimate the efficacy of\nautomated vulnerability detection approaches.\n
Protecting sensitive medical data, including prescription and pill data, during its handling and storage is critical in the digital era. Data vaults that protect privacy provide a strong way to protect this information, guaranteeing that patient information is kept private but yet available for authorised uses. Focussing on the safe preservation of pharmaceutical data, this project investigates the creation of sophisticated algorithms for privacy-preserving data vaults. We start by contrasting the suggested innovative technique, which combines elements of Zero-Knowledge Proofs with Enhanced Homomorphic Encryption, with other known cryptographic and data masking algorithms, such as Differential Privacy, Secure Multi-Party Computation, and Homomorphic Encryption. Data integrity, computational efficiency, and resistance to different attack vectors are some of the characteristics used in the comparison.As the results show, the suggested method offers aimproved performance against confidentiality compromises, especially in real-time data retrieval scenarios, while existing techniques offer varied degrees of efficiency and security. But this comes with more implementation complexity and processing overhead. Improved security characteristics, like less data leakage and strong user authentication systems, are benefits of the suggested approach. Large-scale applications may experience latency problems and require more powerful hardware, which are drawbacks.The trade-offs between various data privacy strategies are highlighted in this study, and it also highlights the necessity for on-going innovation in privacy-preserving technology, which makes a contribution to the region.
Cybercriminals exploit cryptocurrencies to carry out illicit activities. In this paper, we focus on Ponzi schemes that operate on Bitcoin and perform an in-depth analysis of MMM, one of the oldest and most popular Ponzi schemes. Based on 423K transactions involving 16K addresses, we show that: (1) Starting Sep 2014, the scheme goes through three phases over three years. At its peak, MMM circulated more than 150M dollars a day, after which it collapsed by the end of Jun 2016. (2) There is a high income inequality between MMM members, with the daily Gini index reaching more than 0.9. The scheme also exhibits a zero-sum investment model, in which one member's loss is another member's gain. The percentage of victims who never made any profit has grown from 0% to 41% in five months, during which the top-earning scammer has made 765K dollars in profit. (3) The scheme has a global reach with 80 different member countries but a highly-asymmetrical flow of money between them. While India and Indonesia have the largest pairwise flow in MMM, members in Indonesia have received 12x more money than they have sent to their counterparts in India.
Cybercriminals exploit cryptocurrencies, such as Bitcoin, to carry out
various illicit activities. In this paper, we focus on Ponzi schemes that
operate on Bitcoin and perform an in-depth analysis of MMM, one of the oldest
and most popular Ponzi schemes. Based on 423K transactions involving 16K
addresses, we show that: (1) Starting Sep 2014, the scheme goes through three
phases over three years. At its peak, MMM circulated more than 150M dollars a
day, after which it collapsed by the end of Jun 2016. (2) There is a high
income inequality among MMM members, with the daily Gini index reaching more
than 0.9. The scheme also exhibits a zero-sum investment model, in which one
member's loss is another member's gain. The percentage of victims who never
made any profit has grown from 0% to 41% in five months, during which the
top-earning scammer has made 765K dollars in profit. (3) The scheme has a
global reach with 80 different member countries, but a highly-asymmetrical flow
of money between them. While India and Indonesia have the largest pairwise flow
in MMM, members in Indonesia have received 12x more money than they have sent
to their counterparts in India.
In this explorative study we provide empirical insight into how organized crime offenders use IT to launder their money. Our empirical data consist of 30 large-scale criminal investigations into organized crime. These cases are part of the most recent, fifth data sweep of the Dutch Organized Crime Monitor (DOCM). We do not focus on cybercrime alone. Instead, we explore the financial aspects of criminal operations in a broad range of types of organized crime, i.e. from ‘traditional’ types of organized crime, such as offline drug smuggling, to cybercrime. Regarding the spending of criminal proceeds (consumption and investment), the analyses show several similarities and no major differences between traditional crime and cybercrime. When it comes to concealing criminal earnings (money laundering), we do see important differences. Financial innovation, such as the use of cryptocurrencies, seems to be limited to cases of IT-related crime. One of the most striking similarities between cybercrime and traditional crime is the offenders’ preference for cash. In the analysed cases, malware and phishing offenders as well as online drug traffickers change their digital currencies for cash, at least in part.
Evidence and witness play an important role to investigate crime and lawful jurisdiction in any case. But often, the victims do not get justice due to the middlemen and the altered evidences in the centralized network. Block chain is an ideal solution to ensure transparency till the highest hierarchy of jurisdiction using a decentralized peer to peer network to store data which is immutable. It is like a distributed ledger working on the proof of work algorithm that validates each amendment and modification made in a particular chain. Evichain inculcates the transparency and security of the same decentralized network in the crime investigation process. It is an application on which the entire data regarding any particular investigation is stored in a block chain with limited people having access rights. It also includes cases filed by the victims themselves. Every amendment made in the block chain is validated. Also the data access is restricted to the users with that specific private key.
Ayman Alkhalifah, Alex Ng, A. S. M. Kayes, Jabed Chowdhury · 6 authors
Blockchain technology has become one of the most popular technologies for maintaining digital transactions. From the foundation of Bitcoin to the now-predominant smart contract, blockchain technology promises to induce a shift in thought-about digital transactions in many fields, such as energy, healthcare, Internet of Things, cybersecurity, financial services, and the supply chain. Despite blockchain technology offering many cryptography advantages such as immutability, digital signature, and hashing, it has suffered from several critical cybersecurity threats and vulnerabilities. In this chapter, we build upon the previous studies on vulnerabilities and investigate over 60 real cybersecurity incidents that have been happening on the blockchain networks between 2009 and 2019. We categorize those incidents against the key cybersecurity vulnerabilities in blockchain technologies and have developed a taxonomy that captures five types of cybersecurity threats and vulnerabilities based on five main players in blockchain. The outcome of this research prompted concerns and research direction in developing countermeasures to alleviate these risks. Blockchain; Cybersecurity; Attack; Threat; Vulnerability; Taxonomy.
Ankit Gangwal, Samuele Giuliano Piazzetta, Gianluca Lain, Mauro Conti
Cybercriminals have been exploiting cryptocurrencies to commit various unique financial frauds. Covert cryptomining - which is defined as an unauthorized harnessing of victims' computational resources to mine cryptocurrencies - is one of the prevalent ways nowadays used by cybercriminals to earn financial benefits. Such exploitation of resources causes financial losses to the victims. In this paper, we present our novel and efficient approach to detect covert cryptomining. Our solution is a generic solution that, unlike currently available solutions to detect covert cryptomining, is not tailored to a specific cryptocurrency or a particular form of cryptomining. In particular, we focus on the core mining algorithms and utilize Hardware Performance Counters (HPC) to create clean signatures that grasp the execution pattern of these algorithms on a processor. We built a complete implementation of our solution employing advanced machine learning techniques. We evaluated our methodology on two different processors through an exhaustive set of experiments. In our experiments, we considered all the cryptocurrencies mined by the top-10 mining pools, which collectively represent the largest share (84% during Q3 2018) of the cryptomining market. Our results show that our classifier can achieve a near-perfect classification with samples of length as low as five seconds. Due to its robust and practical design, our solution can even adapt to zero-day cryptocurrencies. Finally, we believe our solution is scalable and can be deployed to tackle the uprising problem of covert cryptomining.
Ethereum has become a widely used platform to enable secure, Blockchain-based financial and business transactions. However, a major concern in Ethereum is the security of its smart contracts. Many identified bugs and vulnerabilities in smart contracts not only present challenges to maintenance of blockchain, but also lead to serious financial loses. There is a significant need to better assist developers in checking smart contracts and ensuring their reliability.In this paper, we propose a web service tool, named SmartEmbed, which can help Solidity developers to find repetitive contract code and clone-related bugs in smart contracts. Our tool is based on code embeddings and similarity checking techniques. By comparing the similarities among the code embedding vectors for existing solidity code in the Ethereum blockchain and known bugs, we are able to efficiently identify code clones and clone-related bugs for any solidity code given by users, which can help to improve the users' confidence in the reliability of their code. In addition to the uses by individual developers, SmartEmbed can also be applied to studies of smart contracts in a large scale. When applied to more than 22K solidity contracts collected from the Ethereum blockchain, we found that the clone ratio of solidity code is close to 90\%, much higher than traditional software, and 194 clone-related bugs can be identified efficiently and accurately based on our small bug database with a precision of 96\%. SmartEmbed can be accessed at \url{http://www.smartembed.net}. A demo video of SmartEmbed is at \url{https://youtu.be/o9ylyOpYFq8}
Cryptocurrency investigations have centered almost entirely around the transfer of value “money” or a cryptocurrency asset. The use of cryptocurrency for illicit purposes, especially Bitcoin, is well documented both in academic writing, media reporting and even film documentaries. The infamous SilkRoad market place in addition to the millions of dollars spent within dark markets on drugs, guns and assassinations have grabbed the headlines. This paper looks at how blockchain is creating new areas of investigation that are yet to be explored in detail. This scenario-based research examines the hosting of stolen data (P.I.I) personal identifiable information on a distributed blockchain host where the data is also accessible. The platform used is based on Ethereum infrastructure but demonstrates just one available platform that poses the paradigm. The paper examines the considerations through the lens of an incident responder /cyber investigator, forensics examiner and data controller. The scenario highlights distinct differences in considerations from a traditional response compared to dealing with the immutable and unstoppable distributed technology. The paper concludes that more is needed to be done to understand digital forensics in the blockchain era and the need to develop beyond track and trace in the cryptocurrency investigative tool box. The discussion also brings forth how data retention and GDPR requires consideration when applying it blockchain systems.
ABSTRACT: In the last decade, a new kind of financial technology or “fintech” has emerged, bringing with it a host of legal issues. The most commonly known cryptocurrency, Bitcoin, is touted as the alternative to traditional money systems. Dozens of exchanges have emerged that can be used to store and transfer Bitcoins between virtual wallets. These exchanges are prone to being hacked, however, and without the infrastructure to back the “currency,” users have frequently lost Bitcoins to virtual thieves and been unable to recover their losses. This paper argues that class actions are an effective avenue for remedy against an exchange that has negligently lost Bitcoins. It provides a brief overview of Bitcoin’s underlying technology, the blockchain on which transactions are recorded, and the exchanges out of which they operate. Canadian class actions law is examined in the context of Bitcoin hacks to demonstrate how large-scale litigation can play an increasing role in fintech. There are many examples of cyber attack theft where class actions are the only viable remedy, given the commonality of harm, enormous aggregate losses, and lack of other recourse in an unregulated and uninsured industry. There are also inherent enforcement challenges that need to be addressed by regulators, such as jurisdiction conflict and party anonymity. New technology is constantly emerging and difficult to legally classify. Nevertheless, the paper concludes that class actions law is the best means of protecting consumer interests against fintech risks and supporting the objectives of access to justice, judicial economy, and behaviour modification.
The article examines the legal status of cryptocurrencies in Russia. The authors study the civil and criminal law aspects of this phenomenon. The legislation does not define the legal status of cryptocurrencies, while the theory of law and court practice have not yet worked out a unified approach to it. The authors present an overview of the existing positions regarding this issue and suggest that cryptocurrency should be regarded as other property. It is stated that whatever position is incorporated into law, in real life cryptocurrency is in global circulation and has a great potential. As for criminal law, the authors show that it is relatively independent from civil law when dealing with issues within its object. It is suggested that, for the purposes of criminal law, the available instruments should be adjusted to enable a prompt reaction to the crimes committed at the present moment. The authors analyze the possibility of recognizing cryptocurrencies as an object and instrument of committing crimes within the framework of current legislation. Using the examples different crimes, the authors demonstrate that cryptocurrency could act as an instrument of committing them. It is also stated that cryptocurrency could be recognized as an object of some crimes. To support their position, the authors present such arguments as crimes of terrorism, illegal trade in drugs and psychoactive substances, economic crimes and some others. They also discuss cryptocurrency as an object of theft. It is proven that there is a practical necessity to recognize cryptocurrency as an object of theft. Criticism of this approach by some researchers is also discussed. The authors, however, show that it is possible to solve this problem positively. They conclude that current Russian and foreign legislation should be amended and should define the legal status of cryptocurrencies; however, the goal of criminal law could and should be achieved even before these amendments are adopted.
Francesco Zola, Maria Eguimendia, Jan Lukas Bruse, Raul Orduna Urrutia
Bitcoin is a decentralized, pseudonymous cryptocurrency that is one of the most used digital assets to date. Its unregulated nature and inherent anonymity of users have led to a dramatic increase in its use for illicit activities. This calls for the development of novel methods capable of characterizing different entities in the Bitcoin network. In this paper, a method to attack Bitcoin anonymity is presented, leveraging a novel cascading machine learning approach that requires only a few features directly extracted from Bitcoin blockchain data. Cascading, used to enrich entities information with data from previous classifications, led to considerably improved multi-class classification performance with excellent values of Precision close to 1.0 for each considered class. Final models were implemented and compared using different machine learning models and showed significantly higher accuracy compared to their baseline implementation. Our approach can contribute to the development of effective tools for Bitcoin entity characterization, which may assist in uncovering illegal activities.
Michael Fröwis, Thilo Gottschalk, Bernhard Haslhofer, Christian Rückert · 5 authors
Analyzing cryptocurrency payment flows has become a key forensic method in law enforcement and is nowadays used to investigate a wide spectrum of criminal activities. However, despite its widespread adoption, the evidential value of obtained findings in court is still largely unclear. In this paper, we focus on the key ingredients of modern cryptocurrency analytics techniques, which are clustering heuristics and attribution tags. We identify internationally accepted standards and rules for substantiating suspicions and providing evidence in court and project them onto current cryptocurrency forensics practices. By providing an empirical analysis of CoinJoin transactions, we illustrate possible sources of misinterpretation in algorithmic clustering heuristics. Eventually, we derive a set of legal key requirements and translate them into a technical data sharing framework that fosters compliance with existing legal and technical standards in the realm of cryptocurrency forensics. Integrating the proposed framework in modern cryptocurrency analytics tools could allow more efficient and effective investigations, while safeguarding the evidential value of the analysis and the fundamental rights of affected persons.
Michael Fröwis, Thilo Gottschalk, Bernhard Haslhofer, Christian Rückert · 5 authors
Analyzing cryptocurrency payment flows has become a key forensic method in\nlaw enforcement and is nowadays used to investigate a wide spectrum of criminal\nactivities. However, despite its widespread adoption, the evidential value of\nobtained findings in court is still largely unclear. In this paper, we focus on\nthe key ingredients of modern cryptocurrency analytics techniques, which are\nclustering heuristics and attribution tags. We identify internationally\naccepted standards and rules for substantiating suspicions and providing\nevidence in court and project them onto current cryptocurrency forensics\npractices. By providing an empirical analysis of CoinJoin transactions, we\nillustrate possible sources of misinterpretation in algorithmic clustering\nheuristics. Eventually, we derive a set of legal key requirements and translate\nthem into a technical data sharing framework that fosters compliance with\nexisting legal and technical standards in the realm of cryptocurrency\nforensics. Integrating the proposed framework in modern cryptocurrency\nanalytics tools could allow more efficient and effective investigations, while\nsafeguarding the evidential value of the analysis and the fundamental rights of\naffected persons.\n
Tin Tironsakkul, Manuel Maarek, Andrea Eross, Mike Just
Since the creation of Bitcoin, transaction tracking is one of the prominent means for following the movement of Bitcoins involved in illegal activities. Although every Bitcoin transaction is recorded in the blockchain database, which is transparent for anyone to observe and analyse, Bitcoin's pseudonymity system and transaction obscuring techniques still allow criminals to disguise their transaction trail. While there have been a few attempts to develop tracking methods, there is no accepted evaluation method to measure their accuracy. Therefore, this paper investigates strategies for transaction tracking by introducing two new tainting methods, and proposes an address profiling approach with a metrics-based evaluation framework. We use our approach and framework to compare the accuracy of our new tainting methods with the previous tainting techniques, using data from two real Bitcoin theft transactions and several related control transactions.
The aim of this research is to propose a new blockchain network model that facilitates the secure dissemination of Cyber Threat Intelligence (CTI) data. The primary motivations for this study are based around the recent changes to information security legislation in the European Union and the challenges that Computer Security and Incident Response Teams (CSIRT) face when trying to share actionable and highly sensitive data within systems where participants do not always share the same interests or motivations. We discuss the common problems within the domain of CTI sharing and we propose a new model, that leverages the security properties of blockchain. Our model provides a more effective and efficient framework for a CTI sharing network that has the potential to overcome the trust barriers and data privacy issues inherent in this domain. We implemented a testbed using Hyperledger Fabric and the STIX 2.0 protocol and validated the efficacy of the segmentation, implemented using smart contracts and Fabric channels.
João Antônio Aparecido Cardoso, Felipe Takeshi Ishizu, Jeferson Tadeu De Lima, Jefferson de Souza Pinto
Goal: The present work aims to present how the use of a blockchain two-factor authentication solution 2FA on a page developed on WordPress can contribute to the information security regarding user authentication. Design/Methodology/Approach: The research method employed is characterized as an exploratory research, since all the analysis is based on the theoretical reference data available on the subject. A field research was carried out in relation to the implementation of the multi-factor authentication plugin Hydro Raindrop MFA, which uses blockchain technology offered by The Hydrogen Technology Corporation and the Project Hydro platform over the Ethereum network. Thus, this paper sought to present and conceptualize some of the technologies used, pointing out their contribution to information security. Results: The main results showed that the use of decentralized technology, such as blockchain and the Hydro Raindrop Plugin, can contribute considerably in the process of user authentication, which may strengthen the safeguard of the information and assets of individuals and organizations by inhibiting or reducing the possibility of successful a hacker attack. This solution is at the forefront of innovation with regard to data security because it uses advanced blockchain technology. It might contribute in a satisfactory way to the preservation of critical data and information that are the core value of many organizations of the industry 4.0. Limitations of the investigation: This research was limited to analyzing how the implementation of the Hydro Raindrop multi-factor authentication solution on a WordPress page can be beneficial to ensure information security. Practical implications: This study’s findings can contribute to entities interested in cybersecurity. As a suggestion for future works, analyses of plugins or similar solutions available on the market in distinct types of websites, or performance comparisons between them, may be relevant to contribute to scientific research. Originality/Value: This work can contribute in an innovative way to scientific research, since it addresses a recently created solution that uses blockchain technology as its basis for a safer method of authentication.
Blockchain technology has an enormous scope to revamp the healthcare system in many ways as it improves the quality of healthcare by data sharing among all the participants, selective privacy and ensuring data safety. This paper explores the basics of blockchain, its applications, quality of experience and advantages in disease surveillance over the other widely used real-time and machine learning techniques. The other real-time surveillance systems lack scalability, security, interoperability, thus making blockchain as a choice for surveillance. Blockchain offers the capability of enhancing global health security and also can ensure the anonymity of patient data thereby aiding in healthcare research. The recent epidemics of re-emerging infections such as Ebola and Zika have raised many concerns regarding health security which resulted in strengthening the surveillance systems. We also discuss how blockchains can help in identifying the threats early and reporting them to health authorities for taking early preventive measures. Since the Global Health Security Agenda addresses global public health threats (both infectious and NCDs); strengthen the workforce and the systems; detect and respond rapidly and effectively to the disease threats; and elevate global health security as a priority. The blockchain has enormous potential to disrupt many current practices in traditional disease surveillance and health care research.
Following Bitcoin's Nakamoto Consensus protocol (NC), hundreds of cryptocurrencies utilize proofs of work (PoW) to maintain their ledgers. However, research shows that NC fails to achieve perfect chain quality, allowing malicious miners to alter the public ledger in order to launch several attacks, i.e., selfish mining, double-spending and feather-forking. Some later designs, represented by Ethereum, Bitcoin-NG, DECOR+, Byzcoin and Publish or Perish, aim to solve the problem by raising the chain quality; other designs, represented by Fruitchains, DECOR+ and Subchains, claim to successfully defend against the attacks in the absence of perfect chain quality. As their effectiveness remains self-claimed, the community is divided on whether a secure PoW protocol is possible. In order to resolve this ambiguity and to lay down the foundation of a common body of knowledge, this paper introduces a multi-metric evaluation framework to quantitatively analyze PoW protocols' chain quality and attack resistance. Subsequently we use this framework to evaluate the security of these improved designs through Markov decision processes. We conclude that to date, no PoW protocol achieves ideal chain quality or is resistant against all three attacks. We attribute existing PoW protocols' imperfect chain quality to their unrealistic security assumptions, and their unsatisfactory attack resistance to a dilemma between "rewarding the bad" and "punishing the good". Moreover, our analysis reveals various new protocol-specific attack strategies. Based on our analysis, we propose future directions toward more secure PoW protocols and indicate several common pitfalls in PoW security analyses.
Bitcoin is a popular cryptocurrency that records all transactions in an allotted append-handiest public ledger referred to as a blockchain. The security of Bitcoin heavily relies on the motivation-suitable proof-of-work (PoW) founded dispensed consensus protocol, which is run with the aid of the community nodes known as miners. Because of its inception, blockchain technological know-how has proven promising application possibilities. The spectrum of blockchain functions stages from financial, healthcare, automobile, hazard administration, internet of matters (IoT) to public and social offerings. Several reports focal point on utilizing the blockchain information structure in various applications. These vulnerabilities result in the execution of different security threats to the ordinary functionality of Bitcoin. We then examine the feasibility and robustness of the brand new safety solutions. Moreover, we discuss the current anonymity concerns in Bitcoin and the privatenessrelated threats to Bitcoin customers together with the evaluation of the comprehensive privacy-keeping solutions.