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Cryptocurrency is widely believed to be untraceable. A former FBI agent and cybercrime expert say sophisticated tracking tools can follow Bitcoin trail
PHOENIX — The days of ransom payments stuffed in briefcases are long gone.
Today’s extortionists demand cryptocurrency, believing the digital currency offers an untraceable payday. But cybersecurity experts warn that assumption could be their downfall.
“Everything has moved online in our world, including crime,” said Eric O’Neill, a former FBI agent and cybercrime expert. “Cybercrime right now is built on an engine of cryptocurrency.”
The issue has come into sharp focus with the family of Nancy Guthrie facing a $6 million Bitcoin ransom demand. On Saturday, TODAY Show co-host Savannah Guthrie and her two siblings posted an Instagram video indicating their willingness to pay for their mother’s safe return. The kidnappers set a deadline of 5 p.m. Monday, February 9—a deadline that passed without payment.
How crypto ransom payments work
O’Neill explained that paying such a ransom would begin with $6 million in Bitcoin deposited into a digital wallet on behalf of the family. While the wallet address—a unique alphanumeric string or QR code—is public, it doesn’t reveal the owner’s identity.
“Just because you have a cryptocurrency wallet doesn’t mean that it is tied to someone,” O’Neill said. “You can create anonymous addresses for a cryptocurrency wallet.”
Criminals can then move digital currency from wallet to wallet in what O’Neill describes as a “shell game where the criminals are trying to move it faster than the FBI can track it.”
The weak point: Converting to cash
Despite the perceived anonymity, cryptocurrency has a critical vulnerability. The ransom money doesn’t become usable currency until someone converts it to cash at a regulated bank or cryptocurrency exchange.
“If they are very sophisticated, if they have hired a top-tier cyber criminal to help them, then it’s quite possible that they could confound law enforcement and the FBI,” O’Neill acknowledged. “But the criminals would have to get everything right every time and not make a single mistake.”
Law enforcement agencies have developed sophisticated tools to track cryptocurrency movements, following the digital trail from wallet to wallet.
“In the wide majority of these sort of criminal cases, they’re caught because they make a mistake somewhere,” O’Neill said. “It’s very hard to be perfect all the time.”
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