Crypto Fraud Detection

What is crypto fraud?

Cryptocurrency fraud, or crypto fraud, is a scam or fraudulent scheme involving cryptocurrency. Common types of crypto fraud include financial crimes such as money laundering, “pump and dump” schemes involving false claims, market manipulation, Ponzi schemes, theft of crypto wallets, and silent mining.

What is silent mining?

Silent mining is a form of cyberattack where hackers hijack personal computers, corporate servers, and other devices and use the processing power of these machines to surreptitiously mine for cryptocurrency. Silent mining can cause a slowdown in computer performance, a rise in electricity costs, and slower Internet speeds.

What is crypto fraud detection?

Crypto fraud detection is the process of identifying and preventing fraudulent activities within cryptocurrency transactions and platforms. Given the decentralized and pseudonymous nature of blockchain technology, cybercriminals exploit vulnerabilities such as phishing scams, rug pulls, pump-and-dump schemes, and money laundering.

Fraud detection in this domain relies on advanced cybersecurity techniques, including machine learning algorithms, blockchain analytics, and behavioral analysis, to recognize suspicious patterns and anomalies in transaction data. Cybersecurity teams and fraud analysts use these tools to flag high-risk activities, enhance regulatory compliance, and protect both individual investors and financial institutions from significant losses.

What’s the best form of crypto fraud detection?

By continuously monitoring sites on the deep and dark web, security teams can identify the tactics, techniques and procedures (TTPs) as well as the tools and malware that cyber criminals are using to commit crypto fraud. With this information, teams can configure crypto fraud detection defenses more effectively to block these fraudulent activities.

Preventing threats with crypto fraud detection

The popularity of cryptocurrency has risen sharply in recent years, along with instances of crypto fraud. From crypto Ponzi schemes and traditional theft to money laundering and Initial Coin Offering (ICO) scams, there are a broad range of ways that criminals can profit from fraudulent activity involving cryptocurrencies. 

For corporations, one of the most troublesome forms of crypto fraud is cryptojacking, or silent mining, in which hackers take over computers, servers, smart phones and other devices to surreptitiously mine for cryptocurrency. This processing-intensive activity inevitably decreases the performance of hijacked devices. The overheating involved in silent mining can damage machines or shorten their lifespan.

To block attempts at cryptojacking, companies require crypto fraud detection technologies that can help security teams identify attackers’ methods and block attempts at infiltrating systems. The Bitsight cyber threat intelligence platform offers superior crypto fraud detection capabilities, enabling security teams to monitor fraudulent activities on the deep and dark web.

How cryptojacking works

Cryptocurrencies rely on blockchain technology and cryptographic techniques to securely produce and manage digital currencies while preventing individuals from making copies of individual currency units or attempting to spend them twice. Bitcoin, for example, uses a process known as “mining” in which computers must solve complex puzzles to verify the authenticity of cryptocurrency transactions. In exchange for the compute-intensive process and the energy it consumes, individuals involved in cryptocurrency mining can receive newly created Bitcoins.

As the value of cryptocurrencies like Bitcoin has increased, hackers have found ways to hijack computers of companies or individuals – an act known as cryptojacking – and use them to mine for cryptocurrency without the knowledge of the owners of these devices. 

Crypto fraud detection with Bitsight

Bitsight captures, processes and alerts security teams to emerging threats and indicators of compromise as they surface on the clear, deep and dark web. Harnessing advanced dark web monitoring capabilities, our technology helps organizations to improve fraud detection, prevent phishing scams, identify data leaks, remediate vulnerabilities, and fight many forms of cybercrime.

In recent years, there has been massive growth in dark web discourse about silent or hidden mining technology for sale. Guaranteed to be hidden from a PC’s task manager, these miners do not require administrator rights in order to use the computer’s hardware to mine for cryptocurrency. The sellers of these technologies on the dark web also promise that the miner won’t cause any suspicion, as it has the ability to use the memory of random system processes.

The Bitsight Investigative Portal provides security teams with the ability to monitor deep and dark web sources for the latest tactics, techniques and procedures (TTPs) used in cryptojacking. Our threat intelligence collection capabilities covertly extract data from a wide range of sources, including limited-access deep and dark web forms and markets, invite-only messaging groups, code repositories and paste sites. With Bitsight's crypto fraud detection capabilities, security teams can detect the malware used for silent mining and extract the malware hash. This enables teams to effectively block these technologies on firewalls and trigger playbooks on SIEM, SOAR, EPP, or VM platforms before cyber criminals have even downloaded these crypto fraud tools. 

Other fraud detection solutions

In addition to crypto fraud detection, organizations can rely on Bitsight to enhance fraud management and to detect a wide array of fraudulent activities. 

• Credit card fraud detection. Bitsight helps security teams uncover potential attacks that can lead to breaches of credit card information, and alert security teams as soon as credit card numbers and credentials are posted for sale on the dark web.
• Financial fraud detection. With Bitsight, organizations can more effectively block the cyberattacks that lead to financial fraud, including phishing attacks and brand impersonation as well as attacks aimed at executives.
• Impersonation detection. Security teams can rely on Bitsight to uncover attempts to dupe victims into transferring funds or revealing credentials, using email or social media accounts to impersonate executives.
• Payment fraud detection. Bitsight tracks the activities of threat actors and the sale of payment information on the dark web, helping teams to monitor payment fraud and put protections in place to defend against it.
• eCommerce fraud detection. Our dark web monitoring technology can help to uncover fraudulent eCommerce activity such as refund fraud, chargeback fraud, account takeovers and interception fraud, as well as the data breaches and phishing scams that provide fraudsters with the data they need to commit their crimes.