Business Opportunities from the Rise of Cyber Technology

2481 words (10 pages) Business Assignment

26th Feb 2020 Business Assignment Reference this

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Introduction

In today’s constantly changing IT world, protection of the IT infrastructure against the ever-rising cases of cybercrime has become a subject of great concern. IT managers, IT security experts and other stakeholders in the IT industry are fighting tooth and nail to protect their firms’ IT infrastructure from cybercrime. At the same time, hackers and other unauthorized users are devising sophisticated cybercrime mechanisms to gain access into sensitive information systems (Victor, 2017). Cybercriminals have diversified motivational factors towards accessing information systems. These factors include theft of sensitive business information, data alteration or even monetary interests. Many firms across the globe have ended up losing significant amounts of finances due to cases of cybercrime. This paper therefore focuses on coming up with a well-analyzed discussion on the industry of cybercrime. In simple terms, cybercrime entails a well-organized criminal activity that involves the use of computer devices, the internet and cyberspace to commit fraudulent acts such as hacking and phishing. It is essential to outline that cybercrime is a speedy advancing technology based crime that is usually committed by technocrats (Victor, 2017). Over the years, a significant number of renowned organizations and institutions have fallen victims of cybercrime activities. In essence, cybercrime is a subject of great significance in today’s world since it affects the security of sensitive company data and even finances. Financial loss can result into complete failure by a company to execute its set out day-to-day business operations. On this regard, the existence of maximum cyber security is essential to ensuring that a business succeeds in meeting its set out operation goals. Cybercrime industry falls under the North American Industry Classification Systems (NAICS) code number 561621, which focuses on Security system monitoring services (“Naics/Soc Codes,” 2018).

Findings

Top Trends of the cybercrime Industry

There are a significant number of key trends in cybercrime. These trends lay the basis or foundation for the most cybercrime events that exist across the globe. This paper analyzes three main or top trends of the cybercrime industry. They include cryptocurrency, encrypted communications and fraud with card payment. Below is a summary for each of the identified trends.

Cryptocurrency

It entails a well-designed digital asset that is designed to operate as a medium of exchange using cryptography to provide cryptographic security for financial transactions. It also facilitates creation of more financial units as well as verification of the transfer of assets. In simple terms, this trend is about the use of a virtual currency operating as an official medium of exchange (Spenkelink, 2014). By use of cryptographic algorithms, this trend plays a fundamental role in securing and verifying financial transactions. Most importantly, the use of cryptocurrency is based on limited database of entries that offer maximum data integrity where no change can be executed not unless a unique set of conditions are completed.

Encrypted Communications

This trend involves the transmission of information from one end to another in a manner whereby only the authorized parties can access the hidden content. In this approach, message is presented in form of a cipher text. Most importantly, the information to be transmitted over the cyberspace is first encrypted using complex symmetric and asymmetric data encryption techniques (Rohilla, 2015). Encryption involves the process of encoding information to ascertain that only the targeted end person will be able to access. The targeted end user is then provided with a security key, which allows the user to decrypt the message and gain access to the hidden content. Encrypted communication therefore provides a great platform for users to enjoy safe sharing of sensitive information across the internet. On the other hand, the end person uses the supplied key to decrypt the message. The security of this information is of great significance especially in ascertaining that a firm succeeds in protecting its sensitive business information from any form of unauthorized access. Using the auto-generated encryption keys, this trend plays a crucial role in protecting data transmitted across the computer against any form of unauthorized access. However, sophistication in cybercrime techniques has resulted into the existence of vulnerabilities in the encryption algorithms.

Fraud with Card Payment

It is essential to note that fraud with card payment is one of the key criminal activities on the cyber space. It entails the use of either credit or debit card as a fraudulent source of money in a particular transaction (Sivakumar & Balasubramanian, 2015). The main aim of this act is to obtain or acquire goods without paying any money or even unauthorized obtaining of funds from a particular account. Cybercriminals across the globe make use of credit cards of their victims to either obtain money or buy goods. They imitate the legitimate card owners and then trick the integrated financial or information systems to attain their set out objectives.

Security issue in Cryptocurrency

How Cryptocurrency affects cybercrime and what can be done to minimize risks?

It is important to outline that, over the years; cryptocurrency has been playing a fundamental role in providing alternative medium exchange specifically on online platforms. Companies such as Bitcoin stand out as some of the key pioneers of the technology of cryptocurrency (Brown, 2016). Through the utilization of cryptographic data encryption technique, this technology has created a great environment for conducting online transactions and introduction of new coins. The safety of this information is very crucial to the daily implementation of online payment systems. Regardless of the existing top security measures, hackers and other attackers are constantly devising advanced cybercrime techniques targeting the cryptocurrencies. They usually focus on cracking the encrypted cryptographic data in transmission across the global interconnected set of computer networks. Research indicates that cryptocurrencies have significantly affected cybercrime. This technology involves the use of unique and complex algorithms to provide information security. Criminals are using cryptocurrency to execute their diverse malicious intents. To be exact, there are people who use cryptocurrency to perform various illegitimate financial activities (Carlisle, 2017). These activities include money laundering, evading of government tax or even financing terrorist activities. Some of the key causes of these criminal acts include the subject of anonymity of the perpetrators. That is, most of the implementers of the cryptocurrency transactions are usually anonymous and do all their transactions online. Anonymity is a very crucial problem since it allows transactions to be conducted outside the set out legal parameters (Houben & Snyers, 2018). It also allows the use of cryptocurrency by criminals to gain access to cash. These transactions are conducted in an anonymous environment where proper taxation is not done hence leading to tax evasion. It is however crucial to outline that there are several ways of minimizing the risks of cryptocurrencies. One of the major ways of minimizing cryptocurrency crimes is through the implementation of effective legislations (Houben & Snyers, 2018). These legislations include Anti-Money Laundering Directive with emphasis on getting rid of the existing security loopholes. Legislation will provide a great platform for tracking malicious events and prosecution of the criminals. Goitom (2018) also stresses that the best solution towards minimization of cryptocurrency risks is through regulation. The author analyzes thirteen different jurisdictions around the world. The jurisdictions cover various aspects of cryptocurrency that include the legality of its markets, the treatment of tax in cryptocurrency, applicability of anti-money laundering and anti organized financial crime legislations. Eleven of the analyzed jurisdictions permit the operation of cryptocurrency transactions based on predefined regulations. The remaining two jurisdictions (China and Iran) have developed laws that completely bar their financial institutions from participating in cryptocurrency transactions. To curb the crime, countries such as the United Kingdom and Canada have been striving to implement Anti-Money Laundering and Counterterrorism Financing Legislation (Goitom, 2018). These legislations are fundamental in minimizing the risks presented cybercrimes targeting cryptocurrency. To be exact, the laws allow legislators to use analytic tools in tracing all cryptocurrency transactions and use the details as admissive evidence before a court of law hence assist in minimizing the security risks. It is crucial to outline that the cryptocurrency world is continuously changing and evolving. Innovators and other IT experts are constantly introducing new forms of cryptocurrencies. These cryptocurrencies are utilized in conducting financial transactions all around the world (Spenkelink, 2014). However, the trend has significant effects on cybercrime mainly because of factors such as the rise of illicit actors, lack of consumer protection and financial institutions. Illicit actors include terrorist groups and hackers who utilize the cryptocurrency features such as increased anonymity and ease of use to demand ransom from their victims (Everette, 2017). On the other hand, cryptocurrency consumers are always at a great risk of being victims of unauthorized access and loss of private keys. The risks for the financial sector include lack of adequate financial compliance laws and regulations for the conducting cryptocurrency transactions. There is also lack of satisfactory security controls on the transactions. These risks can be minimized through the introduction of proper legislations that control or allow agencies to monitor all the transactions. Another key approach is the integration of advanced security mechanisms such as PCI and SWIFT, which are crucial in protecting financial transactions from unauthorized access (Everette, 2017). Royal United Services Institute for Defense and Security Studies has provided a thorough scrutiny of the use of virtual currencies in conducting online financial transactions. One of the major providers of cryptocurrencies is Bitcoin. However, cryptocurrency has largely been used in implementing fraudulent activities especially cybercrime (McGuire & Dowling, 2013). In essence, cryptocurrency is the tool favored by hackers and other online thieves in conducting financial theft. Hackers or attackers utilize cryptocurrency to implement ransomware attacks (Brown, 2016). It is also favored in demanding payments by hackers after they have decrypted the server data of their victims. These risks can only be minimized through the introduction of clear legislations that provide authority for agencies to regulate and track all the cryptocurrency transactions conducted by the authorized entities such as Bitcoin.

Conclusion

It is vital to note that the rise of cyberspace technology has provided tremendous opportunities for business growth and expansion of the global customer base. One of the major trends in cyberspace is cryptocurrency. Likewise, cybercrime has enjoyed significant sophistication in tools and mechanisms. It is crucial to outline that cryptocurrency has been of great significance in affecting cybercrime. These crime effects include ransomware attacks, demand of financial payment to decrypt sensitive server data, payment of terrorist groups and loss of financial integrity. The existence of these criminal acts is a great threat to the confidentiality, integrity and effective growth of the cryptocurrency technology. Research indicates that the best ways towards the minimization of the risks include the introduction of effective legislations and strengthening of integrated security mechanisms for conducting financial transactions.

References

  • Brown, S. (2016). Cryptocurrency and criminality: The Bitcoin opportunity. Retrieved from http://journals.sagepub.com/doi/10.1177/0032258X16658927
  • Carlisle, D. (2017). Virtual Currencies and Financial Crime: Challenges and Opportunities. Royal United Services Institute for Defense and Security Studies. Retrieved from https://rusi.org/sites/default/files/rusi_op_virtual_currencies_and_financial_crime.pdf
  • Everette, J. (2017). Risks and Vulnerabilities of Virtual Currency: Cryptocurrency as a Payment Method. Public-Private Analytic Exchange Program. Retrieved from https://www.dni.gov/files/PE/Documents/9---2017-AEP_Risks-and-Vulnerabilities-of-Virtual-Currency.pdf
  • Goitom, H. (2018). Regulation of Cryptocurrency in Selected Jurisdictions. The Law Library of Congress. Retrieved from https://www.loc.gov/law/help/cryptocurrency/regulation-of-cryptocurrency.pdf
  • Houben, R & Snyers, A. (2018). Cryptocurrencies and blockchain. European Parliament. Retrieved from http://www.europarl.europa.eu/cmsdata/150761/TAX3%20Study%20on%20cryptocurrencies%20and%20blockchain.pdf
  • McGuire, M & Dowling, S. (2013). Cyber crime: A review of the evidence. Home Office. Retrieved from https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/248621/horr75-chap2.pdf
  • Naics/Soc Codes. (2018). NCSA. Retrieved from https://www.nsca.org/naicssoc-codes/
  • Rohilla, C. (2015). Encryption and Decryption for Secure Communication. Retrieved from https://www.researchgate.net/publication/306322570_Encryption_and_Decryption_for_Secure_Communication
  • Sivakumar, N & Balasubramanian, R. (2015). Fraud Detection in Credit Card Transactions: Classification, Risks and Prevention Techniques. International Journal of Computer Science and Information Technologies, (6)2, 1-8. Retrieved from https://ijcsit.com/docs/Volume%206/vol6issue02/ijcsit20150602104.pdf
  • Spenkelink, H. (2014). The adoption process of Cryptocurrencies. Retrieved from https://pdfs.semanticscholar.org/5c0d/bbf5c9aa38766d61eac90a0258b4d7d97f6f.pdf
  • Victor, A. (2017). Introducing Cryptocurrency. ResearchGate. Retrieved from https://www.researchgate.net/publication/320616742_INTRODUCING_CRYPTOCURRENCY

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