CRYPTOCURRENCY AND CYBERCRIME

CRYPTOCURRENCY AND CYBERCRIME 

Abstract - Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions. Several cryptographic technologies are combined to make this possible via a global, peer-to-peer network.  The currency is in use today.  It can be traded for other currency, or used to buy goods and services. Bitcoin is an electronic currency designed to use a public protocol that implements it in a totally decentralized manner, so as not to need the  control  of  any  central  issuing organization that manages it. Though still in development, it has been proven to be a modern payment  system referred to have been used in  some procedures  commonly associated  to money  laundering  or  trafficking  of  illegal  substances  of  various kinds. Thus, in this article, we analyze those features which  transform such  a cryptocurrency in  a useful  tool to perform any kind of transactions far from the control of any kind of regulatory agency, as well as we pinpoint some of the fields in which their usage can derive in new illicit behaviours. 
Keywords - Crypto  currency,  cybercrime,  bitcoin,  computer crime,  virtual currencies

 INTRODUCTION

Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions.  Crypto currencies use secret code to verify and secure transaction, and that is where they get their name from.

Definition - Cryptocurrency by whatsoever name called, means any information or code or number or token not being a part of any Digital Official Currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inhert value in any business activity which may involve risk of loss or an expectation of profit or income, or function as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, invested schemes.

In simple words we can say that, “Tradable digital form of money or asset is called Cryptocurrency”. It exists online only and is purely digital, there is no option to take out a cryptocurrency in paper or coin form.

Crypto currency is produced by the entire crypto currency system collectively, at a rate which is defined when the system is created and publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. However, companies or governments cannot produce units of cryptocurrency and as such, have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in a decentralized cryptocurrency.
 Bitcoin
Bitcoin was the first ever cryptocurrency that was developed by an unknown developed or group of developer named Satoshi Nakamoto in year 2008. The first use of Bitcoin as a currency is thought to be a transaction in  May 2010,  where one  user  ordered pizza delivery for another  in  exchange  for  10,000  bitcoins.  Since  then, an increasing number of merchants and services have adopted  Bitcoin and the price has generally risen, reaching a peak of approximately Rs.665224/- per Bitcoin  in 2020.
The price of the cryptocurrency is based on the demand and supply of the cryptocurrency. The price is completely decided by the market forces.
Bitcoin is an electronic currency designed to use a public protocol that implements it in a totally decentralized manner, so as not to need the  control  of  any  central  issuing organization that manages it.
Bitcoin’s history has also been coloured by its association with crime.

 CRYPTOCURRENCY HELPING IN THE GROWTH OF CYBER CRIME
Cryptocurrency is giving a major impact on cyber crime. The private and anonymous nature of transactions has opened a new avenue for these cybercriminals to disappear with your money, leaving no trace.
Cryptocurrencies are high on privacy and anonymity. Even if you can view the wallet to which the money has gone, you will never be able to figure out who it belongs to. These cryptocurrencies can then be transferred via cryptocurrency exchanges and practically be made to ‘disappear’ into a network.
Cryptocurrencies maintains an  association with  cybercrime  due  to internal  security issues  and  its  popularity with  the  black market. The near anonymity provided by the service, its dubious legal status and transnational existence make it an obvious, attractive opportunity for money launderers and criminals alike.

Here are some of the crime that have been increased and easily committed due to the help of the cryptocurrency  –
1. Ransomeware 
Ransomeware are basically the malware (or viruses) which encrypt all the files in your computer. A key is needed to decrypt the files which are provided only after a certain amount of ‘ransom’ is paid to the attacker. This ‘ransom’ is in the form of cryptocurrencies. With cryptocurrency payments, these attackers get impossible to track down and can possibly attack anyone in the world with ease.

2. Cryptojacking
Cryptojacking is a new kind of a cyber-crime which has been picking pace over the past decade. This attack basically involves the use of a javascript on websites. Basically, when a visitor opens the website, their computer automatically starts to mine for cryptocurrencies using the processing power of their CPU without their knowledge.

3. Ponzi Schemes
With cryptocurrencies proving to be an easy avenue for many investors to make quick money and get hefty returns on their investments, Ponzi schemes are on the rise. A number of ‘get rich quick’ sort of schemes have been making their way into the markets. Ponzi schemes and pyramid schemes such as those which offer guaranteed returns on investments are created by cyber-conmen to trick people and part them from their money.

4. Exchange Hacks
Cryptocurrency exchanges too, have become a victim of attacks from cyber criminals. Billions of dollars worth of cryptocurrencies have been stolen by attackers by hacking cryptocurrency exchanges.

5. Trade of Drugs and Weapons
The dark-web is a part of the internet which has gained a mythical status over the years. Almost every trading platform on the dark-web accepts cryptocurrency payments. These websites are involved in everything from drug and weapon trade to even the sale of endangered animals and human organs. Cryptocurrencies have become the favourite means of payment on the dark-web because it allows the traders as well as the buyers to remain highly anonymous. Many governments have expressed their concern that cryptocurrencies are funding the drug trade or sponsoring terror activities.

And many others crimes are being associated with this digital currency i.e. cryptocurrency with have became a very easy way for the criminals for the illegal deals to be transacted without any of the traces left behind and any proof of transaction through which it can be reveal the identity of any person involved in the transactions.


 REGULATION FOR CRYPTOCURRENCY IN INDIA

Cryptocurrency is the digital form of money or assets used in for trading purposes. It is a internet-based medium of exchange which uses cryptographical functions to conduct financial transactions. It does not have a record of transaction and its transaction cannot be traced by any person due to the feature of its privacy and anonymity.

Currently there is no law in India which governs the cryptocurrency in the market. Investment or trading in cryptocurrency is unregulated in India.
The Reserve Bank of India had come up with a circular  in the year 2013 that it has not given any person or body any license of authorization to trade in cryptocurrencies.

The that time Hon’ble Finance Minister Mr. Arun Jaitley has made it clear on the floor of the Parliament that Bitcoin or any other cryptocurrency shall not be regarded as legal tender in India.

A draft of Banning of cryptocurrency and Regulation of Official Digital currency Bill, 2019 is pending in the Parliament for the regulation to be made regarding the Banning of the cryptocurrency in India and for the regulation of the other official digital currency in India. This will provide the regulation for the cryptocurrency in India and will regard the cryptocurrency as illegal to be tendered in India.

Currently, in the present scenario, where cryptocurrency are not a legal tender, and where trading and investment can be done in it, it can be treated as commodity, the price of which is decided by demand and supply.


 CONCLUSION
Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions.  It is the digital form of money or assets used in for trading purposes. It is a internet-based medium of exchange which uses cryptographical functions to conduct financial transactions. It does not have a record of transaction and its transaction cannot be traced by any person due to the feature of its privacy and anonymity. Due to this feature Cryptocurrency maintains an  association with  cybercrime  due  to internal  security issues  and  its  popularity with  the  black market. The near anonymity provided by the service, its dubious legal status and transnational existence make it an obvious, attractive opportunity for money launderers and criminals alike.

The feature of cryptocurrency of privacy and anonymity makes it a currency which is associated with the cybercrime in many ways.
As, currently there is no law in India governing the cryptocurrency in the market. Investment and trading in cryptocurrency is unregulated in India.
Cryptocurrency should be banned and regulated so as to regulate the cybercrime and other related crime like money laundering in India.



 REFERENCES

1. “How cryptocurrency empowering cybercriminals”  https://www.forbes.com/sites/vishalmarria/2019/02/04/how-cryptocurrencies-are-empowering-cybercriminals/#39c7a52737c5
2. “Cybercrime linked to cryptocurrency”  https://datafloq.com/read/six-cyber-crimes-linked-cryptocurrencies/4878
3. Manorma Yearbook  2020 “what is cryptocurrency”
4. “Reserve bank notification” https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11243&Mode=0
5. Bitcoin Price https://www.coindesk.com/price/bitcoin