How Cybercriminals Use Blockchain-based Currencies To Fund Illicit Activities

This paper will introduce how cryptocurrency, blockchain, and cybercrime can play into sanctions evasion. Although not inherently nefarious, cryptocurrency is often used in sanctions evasion due to its pseudo-anonymity, near-instant transaction rate, and the irreversible nature of blockchain transactions. The virtual environment of blockchain-based currency allows for potential cryptojacking and other cryptocurrency theft schemes. Nation-state based hacking groups are able to carry out virtual heists and exfiltrate copious amounts of virtual currency on behalf of a given country, helping to bolster that country’s economy. This stolen virtual currency can then be laundered and used to fund illicit activities. This paper will describe how cybercriminals target blockchain-based virtual currencies and exchanges in order to fund illicit activities. This paper will also convey Argonne National Laboratory’s subject matter expertise and activities supporting counter proliferation finance measures.