AMU Cyber & AI Cybercrime Original

Scammers Are Taking Aim at Cryptocurrency’s Lure of Wealth

By David E. Hubler
AMU Edge Contributor

Scammers are always on the lookout for new marks, people and businesses that, knowingly or not, are vulnerable to losing large sums of money to some illegal activity. The recent ransomware attack on the Colonial Pipeline Company that shut down gas stations all along the Eastern Seaboard for more than a week was just the latest example.

Ransomware is a form of malware that encrypts a victim’s computer data until a ransom is paid. If there is no payment, the cybercriminals threaten to release the data online.

Colonial Pipeline allegedly made a ransom payment of roughly 75 Bitcoin, or nearly $5 million, after the cybercriminals stemmed the flow of oil through Colonial’s pipeline. 

According to The New York Times, “the ransomware attack was the work of DarkSide, an extortionist ring that has been responsible for scores of attacks on companies in several countries. But it is hardly the only group that infiltrates computer systems to extort money. Others go by names like REvil, Maze and LockBit.”

Scammers Always Find New Ways to Separate Funds from Their Rightful Owners

And even though law enforcement departments and government security agencies continually try to spot and thwart these illegal activities, the scammers always find new ways to separate funds from their rightful owners, especially when a new and not well-known product or service hits the market.

Cryptocurrency is one of the current hot trends.

However, the wild fluctuations in the value of cryptocurrencies have turned off many deep-pocketed investors. Earlier this month Elon Musk’s Tesla Motors stopped accepting cryptocurrency as payment for its automobiles, according to Car and Driver.

Cryptocurrency Prices Surge or Crash on Random Events

Eswar Prasad, a Cornell University professor of trade policy, recently noted in The Washington Post that “there is no clear constraint on the supply of these coins, so their prices surge or crash on random events such as tweets from Musk.” 

Prasad quoted Bank of England Governor Andrew Bailey’s position on cryptocurrencies: “Buy them only if you’re prepared to lose all your money.” And he cited Nouriel Rubini, of NYU’s Stern School of Business, as calling bitcoin “the mother or father of all scams.”

That hasn’t deterred Scammers from “cashing in on the buzz around cryptocurrency and luring people into bogus investment opportunities in record numbers,” warned a newly released Data Spotlight report from the Federal Trade Commission.

Since October 2020, “reports have skyrocketed, with nearly 7,000 people reporting losses of more than $80 million on these scams.” The reported median loss was $1,900. “Compared to the same period a year earlier, that’s about twelve times the number of reports and nearly 1,000% more in reported losses,” the FTC report calculated.

Those Who Are New to Cryptocurrency Must Beware of Hackers

“Those who are new to cryptocurrency must beware of hackers who employ social engineering tactics to lure unsuspecting knowledge seekers into downloading malware,” advises Kevin Harris, Program Director, Cybersecurity, Information Systems Security and Information Technology, at American Public University System.

Additionally, the large amount of information shared via social media presents risks of false information being presented as facts, misleading those new to cryptocurrency, he said.

“An effective cybersecurity infrastructure must include technical components but also account for social engineering through user awareness,” Harris added. “Students in APUS cybersecurity degree programs are exposed to both technical and awareness mitigation strategies in the curriculum.” 

Executive Order on Cybersecurity Comes amid a Wave of New Cyberattacks

Citing the administration’s efforts to combat the rising number of ransomware attacks, on May 12, President Biden signed an executive order on cybersecurity, which set standards for any company looking to sell software to the federal government. “The Times said. “The order comes amid a wave of new cyberattacks, more sophisticated and far-reaching than ever before. Over the past year, roughly 2,400 ransomware attacks have hit corporate, local and federal offices.” 

 The ransom issue underscores a dilemma for the president as his administration confronts an increasing number of cyberattacks against government and industry,” the Times noted. Colonial’s “decision to pay the ransom may help Mr. Biden stanch the political fallout from rising gas prices and long lines at the pumps, but it emboldens other criminal groups or rogue states to take American companies hostage by seizing control of their computers.”

David E. Hubler brings a variety of government, journalism and teaching experience to his position as a Quality Assurance Editor. David’s professional background includes serving as a senior editor at CIA and the Voice of America. He has also been a managing editor for several business-to-business and business-to-government publishing companies.

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