Bitcoin theft, fraud, money laundering will be ‘BOOSTED by GDPR’

And with the EU’s GDPR legislation coming into force today, one expert has warned that the new GDPR rules will “negatively impact the overall security of the internet and inadvertently aid cybercriminals”.

New data is starting to arrive on the staggering amounts of Bitcoin, Ethereum and Ripple that have been stolen by cyber criminals since December last year when prices soared and Bitcoin multiplied more than 13 times as eager investors piled in to a space overburdened with bad actors and naked criminality.

Dave Jevans, chief executive officer of cryptocurrency security firm CipherTrace, said: “One problem that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys.”

Of the $1.2 billion, Jevans estimates that only about 20 percent or less has been recovered, noting that global law enforcement agencies have their hands full tracking down these criminals.

However, the group’s investigations in bitcoin crime are likely to be hurt by the European Union’s new General Data Protection Regulation, which takes effect today.

Mr Jevans said: “GDPR will negatively impact the overall security of the internet and will also inadvertently aid cybercriminals.

“By restricting access to critical information, the new law will significantly hinder investigations into cybercrime, cryptocurrency theft, phishing, ransomware, malware, fraud and crypto-jacking.”

GDPR, which passed in 2016 but comes into power today, aims to simplify and consolidate rules that companies need to follow in order to protect their data and to return control of personal information to EU citizens and residents.

The implementation of GDPR means that most European domain data in WHOIS, the internet’s database of record, will no longer be published publicly after May 25. WHOIS contains the names, addresses and email addresses of those who register domain names for websites.

Mr Jevans adds that WHOIS data is a fundamental resource for investigators and law enforcement officials who work to prevent thefts and is crucial in performing investigations that allow for the recovery of stolen funds, identifying the persons involved and providing vital information for law enforcement to arrest and prosecute criminals.

He said: “So what we’re going to see is that not only the European market goes dark for all of us; so all the bad guys will flow to Europe because you can actually access the world from Europe and there’s no way you can get the data anymore.”

Ilia Kolochenko, CEO of web security company High-Tech Bridge told Express.co.uk that unregulated cryptocurrencies have become a “gold rush” for cybercriminals.

Mr Kolochenko described a well-prepared crypto attack as “un-investigable” with the “risk of persecution bordering on zero” for those involved.

He said: “While the stolen coins can be easily laundered and used for the niceties of life, we will likely see a continuous growth of attacks against cryptocurrency owners and processors – exchanges – by various means from trivial phishing to sophisticated APT attacks against the largest trading platforms.”

He advises that to reduce the risks, one should never entrust his or her wallet to third parties, remain vigilante for any incoming messages, emails or hyperlinks, have an updated AV and a machine with all security patches properly installed. He added “investments into dubious ICO projects should be clearly understood as high-risk”, with the chance of losing money at “above 99 percent.”