“Platforms like Monero are designed to be truly anonymous, and tumbler services like CoinJoin can [further] obscure transaction origins,” said Dr Mike McGuire, senior lecturer in criminology at Surrey University and author of the study.
Many cybercriminals are using virtual currency to convert the illegal proceeds of crime into hard cash and assets. Digital payment systems are used to help hide the money trail.
Methods like “micro laundering”, where thousands of small electronic payments are made through platforms like PayPal, are increasingly common and more difficult to detect. Another common technique is to use online transactions – via sites like eBay – to facilitate laundering.
Crooks are circumventing PayPal and eBay’s anti-fraud controls, even though both are “getting better at picking up laundering techniques”, according to Dr McGuire.
“Keeping transactions low, say $10-12, makes laundering almost impossible to spot, as they look like ordinary transactions. It would be impossible to investigate every transaction of this size. By making repeated small payments, or limited transactions, your profile begins to gain the ‘trust’ of controls systems, which makes it even harder to detect laundering as payments are less likely to be flagged.”
Botnets can be used to make thousands of these transactions and increase your trust rating.
“I have also seen evidence of multi-stage laundering, where criminals will make payments through websites like Airbnb which look completely legitimate. Cybercriminals are also gaining access or control of legitimate PayPal accounts by phishing emails. I also saw it was easy to buy stolen credentials from online forums to gain access to hundreds of PayPal accounts which can then be used to launder payments.”
McGuire said cybercriminals are working with the fraud controls to then manipulate them by applying to go beyond current annual payment limits and then providing false or hacked documentation to support the checks which permit larger payments.
Cybercriminals elsewhere are active in converting stolen income into video game currency or in-game items like gold, which are then converted into Bitcoin or other electronic formats. Games such as Minecraft, FIFA, World of Warcraft, Final Fantasy and GTA 5 are among the most popular options because they allow covert interactions with other players to facilitate the trade of currency and goods.
“Gaming currencies and items that can be easily converted and moved across borders offer an attractive prospect to cybercriminals,” Dr McGuire told The Register. “This trend appears to be particularly prevalent in countries like South Korea and China – with South Korean police arresting a gang transferring $38m laundered in Korean games back to China.
“The advice on how to do this is readily available online and explains how cybercriminals can launder proceeds through both in-game currencies and goods.”
The findings come from a nine-month study into the macro economics of cybercrime, sponsored by infosec vendor Bromium