An Anatomy of Crypto-Enabled Cybercrimes

58 Pages Posted: 18 Aug 2022 Last revised: 25 May 2023

See all articles by Lin William Cong

Lin William Cong

Cornell University - Samuel Curtis Johnson Graduate School of Management; National Bureau of Economic Research (NBER)

Campbell R. Harvey

Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

Daniel Rabetti

National University of Singapore (NUS)

Zong-Yu Wu

Fox It

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Abstract

While the advent of cryptocurrencies and digital assets holds promise for improving and disrupting
financial systems by offering cheap, quick, and secure transfer of value, it also opens up new payment channels for cybercrimes. A prerequisite to solving a problem is understanding the nature of the problem. Assembling a diverse set of public, proprietary, and hand-collected data, including dark web conversations in Russian, we conduct the first detailed anatomy of crypto-enabled cybercrimes and highlight relevant economic issues. Our analyses reveal that a few organized ransomware gangs dominate the space and have evolved into sophisticated corporate-like operations with physical offices, franchising, and affiliation programs. Leading ransomware gangs operate from Russian-speaking regions and mainly target U.S. and Western Europe enterprises. Their techniques have become more aggressive, entailing multiple extortion and reputation management layers and leading firms to underreport security breaches. Blanket restrictions on cryptocurrency usage may prove ineffective in tackling crypto-enabled cybercrime and hinder innovations. Instead, blockchain transparency and digital footprints enable effective forensics for tracking, monitoring, and shutting down dominant cybercriminal organizations.

Keywords: Forensic Accounting, Blockchain Analytics, Digital Economy, Cryptocurrency, Cybercrime

JEL Classification: F24, F52, G15, G18, G23, G38, K42

Suggested Citation

Cong, Lin and Harvey, Campbell R. and Rabetti, Daniel and Wu, Zong-Yu, An Anatomy of Crypto-Enabled Cybercrimes. Available at SSRN: https://ssrn.com/abstract=4188661 or http://dx.doi.org/10.2139/ssrn.4188661

Lin Cong

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

HOME PAGE: http://www.linwilliamcong.com/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Campbell R. Harvey

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7768 (Phone)

HOME PAGE: http://www.duke.edu/~charvey

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Rabetti (Contact Author)

National University of Singapore (NUS) ( email )

1E Kent Ridge Road
NUHS Tower Block Level 7
Singapore, 119228
Singapore

Zong-Yu Wu

Fox It ( email )

NY

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