J.J. Oerlemans, Bart Custers, Ronald Pool, R. Cornelisse
Het witwassen van geld dat wordt verkregen uit cybercrime vindt in de regel plaats via digitale betalingsmiddelen. De reden daarvoor is dat het geld bij cybercrime vaak wordt verkregen via online betalingsmethoden en virtuele valuta. De hoofdvraag van dit onderzoek luidt: Op welke wijze en door welke actoren wordt geld dat wordt verkregen uit banking malware en ransomware (al dan niet digitaal) witgewassen?De deelvragen van het onderzoek luiden als volgt:Wat wordt verstaan onder het witwassen van door banking malware en ransomware verkregen geld en hoe wordt witwassen juridisch gekwalificeerd?Wat zijn digitale betalingsmiddelen, in het bijzonder virtuele valuta zoals Bitcoin, en hoe werken deze digitale betalingsmiddelen?Op welke wijze en door welke actoren wordt geld witgewassen dat: a door middel van banking malware wordt verkregen? b door middel van ransomware wordt verkregen?Wat zijn de kenmerken van actoren die betrokken zijn bij het witwassen van geld dat wordt verkregen uit banking malware en ransomware?Welke informatie over de modus operandi van actoren, die betrokken zijn het bij het witwassen van geld dat verkregen wordt uit banking malware en ransomware, is beschikbaar op het dark web?Welke rol spelen digitale betalingsmiddelen, in het bijzonder virtuele valuta zoals bitcoins, bij het witwassen van geld dat wordt verkregen uit banking malware en ransomware?
Money laundering is a growing issue which has in later years emigrated more and more to the digital sphere of Bitcoin. Its pseudonymous nature and unrigorous legal definition has made regulation a difficult challenge. This thesis provides a unique take on the Bitcoin money laundering problematique by using incentive structures in place of forced restrictions. The goal is to create, validate and analyze a game theoretic incentive model which aims to combat money laundering by increasing the transaction costs for money laundering Bitcoin users without affecting the transaction costs for the honest users. The results prove the model to be feasible, leading to the conclusion that its real-world application has the potential to combat money laundering in Bitcoin to a significant degree.
Published as: Shackelford, S., and S. Myers. 2017. “Block-by-Block: Leveraging the Power of Blockchain Technology to Build Trust and Promote Cyber Peace.” Yale Journal of Law & Technology 19:334–388. \n"There has been increasing interest in the transformative power of not only crypto-currencies like Bitcoin, but also the technology underlying them—namely blockchain. To the uninitiated, a blockchain is a sophisticated, distributed online ledger that has the potential, according to Goldman Sachs, to 'change everything.' From making businesses more efficient to recording property deeds to engendering the growth of ‘smart’ contracts, blockchain technology is now being investigated by a huge range of organizations and is attracting billions in venture funding. Even the U.S. Defense Advanced Research Projects Agency (DARPA) is investigating blockchain technology to 'create an unhackable messaging system.' However, the legal literature has largely ignored the rise of blockchain technology outside of its finance, securities, and copyright implications. This Article seeks to address this omission by analyzing the potential impact of blockchain technology on advancing the cybersecurity of firms across an array of sectors and industries with a particular focus on certificate authorities and the critical infrastructure context. Moreover, we examine the rise of blockchains through the lens of the literature on polycentric governance to ascertain what lessons this research holds to build trust in distributed systems and ultimately promote cyber peace."
Bitcoins have opened a new chapter in the arena of electronic financial transactions. Due to their decentralized nature and independence from the need of a third party for authorizing transactions, they are seen as an alternative choice for payments by many firms and financial institutions. But like all other prevalent financial transaction technologies, they are also having their securities issues of their own kind. The current article discusses the security issues associated with the bitcoins based financial transaction processing system and various proposed research endeavors to combat them in recent years.
Bitcoin and other cryptocurrencies transformed the trade in illegal goods, especially drugs. Thanks to them in conjunction with other anonymization tools could arise dark markets, illegal marketplaces in cyberspace. Despite active intervention by the authorities, their number and quantity of goods on offer is growing significantly. Besides, we observed a tendency to change the structure of the drug market. This article is next to the description of the operation of dark markets based on identified trends and look to the future of how will dark markets look like. . . . . . . . . . . . .
Tema ovog rada su kriptovalute. Budući da većina ljudi nije pravodobno upoznata s ovom temom, ovaj rad prikazuje i opisuje kriptovalute te način na koji se upotrjebljuju u svakodnevnom životu. Kriptovalute (eng. cryptocurrency) digitalne su valute dizajnirane kao sredstvo razmjene. Poznate su po tome što su državne agencije i banke isključene iz procesa razmjene. Kriptovalute omogućuju jednostavnu, jeftinu i brzu transakciju na području cijeloga svijeta. Trenutno najisplativije kriptovalute su Bitcoin i Ethereum, a u radu je opisana njihova korisnost, prednosti i mane. Budući da se Bitcoinu predviđa uspješna budućnost i sve je prisutniji i prihvatljiviji na tržištu, u radu su navedeni primjeri iz Hrvatske koji to potvrđuju. Sve veći broj poduzetnika odlučuje se za uvođenje kriptovaluta. U primjerima je obuhvaćen širok spektar djelatnosti, od frizerskih usluga, preko raznih tvrtki koji se bave prodajom računalne opreme, ugostiteljskih usluga preko mogućnosti brzog i lakog podizana gotovine na kripto bankomatima pa sve do plaćanja komunalnih usluga, pa čak i humanitarno djelovanje. Mnogi smatraju da su kriptovalute samo sinonim za prijevare i pranje novca, no programeri tvrde da su kriptovalute samo jedna vrsta tehnologije, alat koji sam po sebi ne može biti ni dobar ni loš, ovisno o tome za što se koristi. Autor ovoga rada proveo je istraživanje o tome kako se može besplatno započeti trgovanje kriptovalutama te je anketom ispitao stavove ispitanika o implementaciji kriptovaluta u društvu.
In this article, we explore the formidable yet untapped capabilities of Blockchain technology and Bitcoin in order to alleviate poverty. We focus on the Republic of Moldova, which has been plagued by endemic corruption and persistently high poverty levels since her independence in 1991 following the collapse of the Soviet Union. The transformative power of Blockchain technology and Bitcoin are then evidenced through a dual analysis of tourism 2.0 (with a real-world case study) and e-governance, which can contribute to increased inward capital investment flows, and help fight off corruption practices. Finally, we conclude that these new technologies constitute a significant step in the right direction, in order to break away from twenty-five years of disappointing socio-economic development performance.
We document systematic differences in bitcoin prices across 11 different markets representing 26% of global bitcoin trade volume. These differences must -due to the identical nature of all bitcoin -result from characteristics of markets themselves. We examine differences across the markets and find that those which do not require customer identification for establishing an account are more likely to deviate from representative market prices than those which do. This implies that standard financial regulations, specifically know-your-customer regulations, can have a non-negligible impact on the bitcoin market.
This paper examines Bitcoin from a legal and regulatory perspective, answering several important questions. \n \nWe begin by explaining what Bitcoin is, and why it matters. We describe problems with Bitcoin as a method of implementing a cryptocurrency. This introduction to cryptocurrencies allows us eventually to ask the inevitable question: is it legal? What are the regulatory responses to the currency? Can it be regulated? \n \nWe make clear why virtual currencies are of interest, how self-regulation has failed, and what useful lessons can be learned. Finally, we produce useful and semi-permanent findings into the usefulness of virtual currencies in general, blockchains as a means of mining currency, and the profundity of Bitcoin as compared with the development of block chain technologies. We conclude that though Bitcoin may be the equivalent of Second Life a decade later, so blockchains may be the equivalent of Web 2.0 social networks, a truly transformative social technology.
Kriptovalute su digitalni novac utemeljen na kriptografiji i decentraliziranom sustavu. Postoje samo u elektroničkom obliku kao jedinstveni digitalni novčići ("tokeni"). Iza njih ne stoji autoritet države niti ih je moguće svojevoljno proizvesti. Rad se fokusira na značajkama, postavkama, razvoju i svim međuodnosima važnih ekonomskih faktora koji utječu na kriptovalute. U prvom poglavlju navedena su obilježja kriptovaluta. Drugo poglavlje daje primjere i govori o primjeni kriptovaluta u svakodnevnom životu. U trećem poglavlju je raspravljano o trenutnim i budućim regulacijama najmoćnijih zemalja svijeta (G20) , kao i njihovoj zajedničkoj suradnji u želji za jedinstvenim i standardiziranim pravilima, a sve u svrhu što kvalitetnijeg nadzora nad kriptovalutama kako bi se spriječile malverzacije i zaštitili potrošači. Četvrto poglavlje govori o inicijalnoj ponudi kovanica, a peto poglavlje je namijenjeno sigurnosti kriptovaluta. Cilj istraživanja je utvrditi koliko je studentska populacija upoznata i usmjerena prema novim oblicima digitalnog novca, koje značajke kriptovaluta smatraju pozitivnima, a koje negativnima i u kojoj su mjeri investirali ili su spremni investirati dio svojih ulaganja u kriptovalute i sl. Metode istraživanja korištene u radu su kompilacija na temelju proučavanja postojeće literature o temi rada, prikupljanje i analiza podataka vezanih uz kriptovalute, ponajprije podataka vezanih uz cijene i tržišnu kapitalizaciju, anketiranje studenata Ekonomskog fakulteta u Rijeci i metoda dedukcije putem koje su pokazane sve važne karakteristike i obilježja kriptovaluta. Na temelju provedene ankete u kojoj je sudjelovalo 90 studenata Ekonomskog fakulteta u Rijeci zaključak toga dijela istraživanja je da je mlada populacija dobro upoznata s kriptovalutama i njenim glavnim značajkama, ali i određenim nedostatkom informiranosti o tehnologiji (trećina studenata nije čula za pojam "blockchain") i nedovoljnoj odlučnosti oko investiranja i trgovanja u kriptovalute. Povrh toga, dokazan je i negativan utjecaj hakerskih napada i određenih kriminalnih radnji, kao i nestabilnost tržišne cijene na povjerenje studenata, ali i ukupne populacije vezane uz globalni financijski sustav u kriptovalute. Ishod istraživanja omogućio je da zaključimo kako su kriptovalute trenutno u ranoj fazi razvoja i nisu se dovoljno implementirale za široku primjenu u trgovini roba i usluga ili općenito kao sredstvo razmjene. Faktor koji je uključen u istraživanje kako bi opisao veličinu, odnosno obujam neke kriptovalute je tržišna kapitalizacija u dolarima. Temeljna ideja ovog rada je informirati čitatelja o pozitivnim i negativnim značajkama koje se se vežu uz kriptovalute. Na taj način čitatelji će biti bolje informirani i educirani o potencijalnom riziku ulaganja u kriptovalute, kao i većoj razini zaštite prilikom posjedovanja neke digitalne valute.
There are over 275 virtual currencies in existence today. One of these currencies is Bitcoin, the largest andmost recognised virtual currency in the world. With its exponential growth over recent years, Bitcoin isbringing a degree of permanence for, and dependability on virtual currencies that can no longer be ignored byregulators. While an increase in international regulatory activity over the past 12 months suggests that somegovernments understand this, Australian regulators appear reluctant to act. In addition to examining Bitcoin’soperational system in detail, this article examines the affect that Bitcoin is having on two key features of thefinancial system: (1) the money laundering and illicit finance supply system; and (2) the payment system. Bycomparing the effectiveness of the response measures enacted by Australian and international regulators inCanada, Singapore, the United States, and the United Kingdom, this article demonstrates that even thoughAustralia’s current payment system policy is capable of addressing the threats posed by virtual currencies, thecurrent money laundering and terrorist financing regulations fail to satisfy Australia’s international obligations,and stifle the legitimate use and development of virtual currencies in Australia.
Bitcoin is a peer-to-peer electronic payment system that operates as an independent currency. This paper is a philosophical investigation of the ontological constitution of Bitcoin. Using Slavoj Žižek’s ontological triad of the real, the symbolic and the imaginary, the paper distinguishes between three ideal typical theories of money: commodity theory, fiat theory, and credit theory. The constitution of Bitcoin is analysed by comparing the currency to each of these ideal types. It is argued that Bitcoin is commodity money without gold, fiat money without a state, and credit money without debt. In conclusion, it is suggested that Bitcoin poses an ideological challenge to conventional forms of money in so far as it not only provokes sedimented beliefs about money but also exposes the forms of exploitation, risk and even violence inherent in the existing system of state authorized credit money.
Abstract This paper is an analysis of the role reputation plays in the Deep Web using data from the Internet black-market site, The Silk Road. This encrypted online marketplace employed cryptocurrency and functioned over the Tor network. Utilizing a modeling technique, informed by trade auction theory, we investigate the effect of seller reputation. Analysis of the seller's reputation gives us insights into the factors that determine the prices of goods and services in this black marketplace. Data on cannabis listings is parsed from the Silk Road website and covers an 11-month time period, from November 2013 to October 2014. This data demonstrates that reputation acts as a sufficient self-enforcement mechanism to allow transactions. These findings exemplify the robustness of spontaneous order with respect to the Deep Web as an emergent marketplace.
Craig K. Elwell, Margaret Murphy, Michael V. Seitzinger
This report has three major sections. The first section answers some basic questions about Bitcoin and the operation of the Bitcoin network and its interaction with the current dollar-based monetary system. The second section summarizes likely reasons for and against widespread Bitcoin adoption. The third section discusses legal and regulatory matters that have been raised by Bitcoin and other digital currencies.
Peggy Valcke, Niels Vandezande, Nathan Van de Velde
The research looked at which third party payment providers (TPP’s) are covered by the PSD2 and AMLD4 directives, the consequences thereof, as well as to what extent such coverage goes; and sought to analyse the potential for the regulation of cryptocurrency in terms of combatting money laundering and terrorist financing. TPP’s gain possession of a significant amount of sensitive information, for instance by providing a gateway from which consumers log in to their bank accounts using their unique identifiers and credentials. As a result, these entities are drawing increasingly more attention from legislators and regulators.Under the framework of the PSD2, TPP’s will be subject to stringent regulatory standards similar to those placed on traditional payment service providers under the PSD. In the US, regulation of TPP’s must be assessed on a state-by-state basis. In Florida, for instance, they can be considered as money transmitters, thus putting them under that regulation, as well as the federal Bank Secrecy Act. In Asia, the number of TPP’s has grown significantly over the past years. In China, these actors are regulated by the People’s Bank of China, and are subjected to a number of requirements similar to those found in the EU, such as minimum capital requirements and anti-money laundering rules.Another notable development is that of alternative payment methods – a prime example here are cryptocurrencies such as bitcoin. The bitcoin ecosystem is decentralized, meaning that no single entity controls the system. Currently, there exists no convincing arguments to consider virtual currencies as regulated under the EU’s Payment Services Directive or the Second E-money Directive. While the PSD2 does introduce new terminology and significantly amended scope exemptions compared to the original Payment Services Directive, there is no wider inclusion of virtual currencies under its scope. A similar argument can be made for the recently adopted AMLD4, where virtual currencies have been omitted from its scope despite earlier signs that this development may be included. The researchers conclude their paper with several public and private sector recommendations.
Bitcoin is a decentralized crypto-currency, and an accompanying protocol, created in 2008. Bitcoin nodes continuously generate and propagate blocks---collections of newly approved transactions that are added to Bitcoin's ledger. Block creation requires nodes to invest computational resources, but also carries a reward in the form of bitcoins that are paid to the creator. While the protocol requires nodes to quickly distribute newly created blocks, strong nodes can in fact gain higher payoffs by withholding blocks they create and selectively postponing their publication. The existence of such selfish mining attacks was first reported by Eyal and Sirer, who have demonstrated a specific deviation from the standard protocol (a strategy that we name SM1). In this paper we extend the underlying model for selfish mining attacks, and provide an algorithm to find $ε$-optimal policies for attackers within the model, as well as tight upper bounds on the revenue of optimal policies. As a consequence, we are able to provide lower bounds on the computational power an attacker needs in order to benefit from selfish mining. We find that the profit threshold -- the minimal fraction of resources required for a profitable attack -- is strictly lower than the one induced by the SM1 scheme. Indeed, the policies given by our algorithm dominate SM1, by better regulating attack-withdrawals. Using our algorithm, we show that Eyal and Sirer's suggested countermeasure to selfish mining is slightly less effective than previously conjectured. Next, we gain insight into selfish mining in the presence of communication delays, and show that, under a model that accounts for delays, the profit threshold vanishes, and even small attackers have incentive to occasionally deviate from the protocol. We conclude with observations regarding the combined power of selfish mining and double spending attacks.
Digital currencies, such as Bitcoin, offer convenience and security to criminals operating in the black marketplace. Some Bitcoin marketplaces, such as Silk Road, even claim anonymity. This claim contradicts the findings in this work, where long term transactional behavior is used to identify and verify account holders. Transaction timestamps and network properties observed over time contribute to this finding. The timestamp of each transaction is the result of many factors: the desire purchase an item, daily schedule and activities, as well as hardware and network latency. Dynamic network properties of the transaction, such as coin flow and the number of edge outputs and inputs, contribute further to reveal account identity. In this paper, we propose a novel methodology for identifying and verifying Bitcoin users based on the observation of Bitcoin transactions over time. The behavior we attempt to quantify roughly occurs in the social band of Newell's time scale. A subset of the Blockchain 230686 is taken, selecting users that initiated between 100 and 1000 unique transactions per month for at least 6 different months. This dataset shows evidence of being nonrandom and nonlinear, thus a dynamical systems approach is taken. Classification and authentication accuracies are obtained under various representations of the monthly Bitcoin samples: outgoing transactions, as well as both outgoing and incoming transactions are considered, along with the timing and dynamic network properties of transaction sequences. The most appropriate representations of monthly Bitcoin samples are proposed. Results show an inherent lack of anonymity by exploiting patterns in long-term transactional behavior.
Proces globalizacji i rewolucji informacyjnej to zjawiska, które determinują rzeczywistość społeczno-gospodarczą współczesnego świata. Znalazły one praktyczne odzwierciedlenie w funkcjonowaniu systemów pieniężnych w globalnej gospodarce światowej, przede wszystkim w nowej postaci cyberwaluty, jaką jest bitcoin. Przedmiotem artykułu są przesłanki powstania, istota, zasady i sposób działania bitcoina. Jego cechy oraz coraz szerszy zakres funkcjonowania tej cyberwaluty mogą w przyszłości zagrażać bezpieczeństwu w wymiarze społecznym, gospodarczym i międzynarodowym.