Cryptocurrency in five criminal contexts

Cryptocurrency has become very popular in recent years, because it is a form of payment that has been characterized as beneficial by many.

With that said, cryptocurrency will not only be used as a payment method. This is also a type of currency that criminals seem to have a sense of . In this article, we will look at the five criminal contexts in which cryptocurrency can be used.

Cryptocurrency versus traditional currency

Before we go into more detail on the actual topic of this article, we need to take a look at what separates cryptocurrency from traditional currency.

By comparing these two, one will almost immediately see that it is not difficult to distinguish these currencies from each other. Here there are both similarities and differences.

Applications

Both cryptocurrency and traditional currency can be used as a payment method and can enable you to make investments.

The former ( use of cryptocurrency as a payment method ), however, presupposes that you shop with a player who accepts cryptocurrency as payment – not everyone does that yet.

Digital versus not digital

The use of cryptocurrency takes place digitally, while the use of traditional currency can take place in different ways.

Traditional currency can be used to pay via the internet, ie digitally, but it is also possible to withdraw coins and banknotes at the bank, which you can also use as a means of payment.

Alternatively, you can use a debit card – this is then linked to your bank account.

Centralized versus decentralized

All transactions made with a debit card are monitored by a third party. Such a third party may be a bank . When using cryptocurrency, you avoid this step, because most cryptocurrencies are decentralized.

The process itself

Paying with traditional currency is a fairly private process, especially if you pay with a debit card.

If you pay with physical money, then of course you have to count the money there and then. But with a debit card, you only enter a code, and only the cardholder knows the code (unless he or she has shared the information with someone else).

This is partly also the case with cryptocurrency, because with it comes both a private and a public key. The private key is secret, while the public key is not. It is often referred to as an address to be given to the person who wants to transfer cryptocurrency to you.

Cryptocurrency is generally associated with openness to a much greater degree than traditional currency.

Increased crime in connection with cryptocurrency

As we saw in the previous section, there are many advantages to using cryptocurrency, for example that you are not dependent on a third party in the same way as you are using traditional currency.

But this simplicity has meant that people who do not have completely clean flour in the bag have also opened their eyes to cryptocurrencies – criminals.

Due to the fact that the transactions are not monitored by a third party, it is difficult to track where each individual transaction goes. This has led to cryptocurrency being a very topical method in connection with crime.

Below we will look at five different contexts in which cryptocurrency can be used (and has been used) in connection with crime.

Claim for ransom in connection with abductions

It is not to be underestimated that there are people in this world who are quite sinister and who do horrible things that include other, innocent people.

Therefore, there are unfortunately many examples of criminal situations where one or more people have joined forces to abduct a person. It could be an abduction that has been carefully planned over several years, or it could be completely random. That someone was simply in the wrong place at the wrong time. Just read this article about a poor 14-year-old who was abducted due to success with Bitcoin investing.

It is not uncommon for planned abductions to include some form of communication between the perpetrators and the relatives. If one of the relatives, for example, is a very rich person, then it is not uncommon for the perpetrators to say that the abducted person may go against the relatives paying ransom.

In such situations, the perpetrators often want the ransom in cryptocurrency, such as monero. And in such cases, the actual use of the cryptocurrency is not illegal. The exchange itself is actually within the framework of the law, but it is the criminal act that is illegal.

Money laundering

Money laundering is also something that is happening in our world today – also in connection with cryptocurrency.

People can try money laundering in different situations, but it often happens in connection with a criminal act. However, the purpose is the same – to cover up the criminal act.

In practice, money laundering is simply about lying about where you got the money from.

Use of mules

The use of mules is a sub-method of money laundering.

It means that the cryptocurrency is transferred to a person who has no connection to the criminal act or the person behind it for the person to exchange them into another currency and give the money back to the other person.

With that said, it is not necessarily the case that the mule knows that they have been given the role of mule.

Tax fraud

Most people who trade in cryptocurrencies know that they are liable to pay taxes , since cryptocurrency is considered an asset. If you do mining, for example, and it gives you a significant income, then you are obliged to tax it.

Therefore, it is important to familiarize yourself with the tax rules that apply to you and your activity. With that said, it does not always take time for that – and in some cases this is a conscious choice.

Theft of cryptocurrency

Last but not least, there are also people who are actively involved in stealing other people’s cryptocurrencies, for example by hacking a crypto wallet that does not belong to them.

In connection with this type of crime, we are often talking about large sums, often several millions!

Further investigations also show that there is reason to believe that there is often talk of organized crime when such large sums of cryptocurrency disappear.