Threats to Cryptocurrencies and NFTs
While cryptocurrencies are not inherently tied to illicit use, criminal and nation-state actors do abuse cryptocurrency platforms and users in two ways. The first is direct theft of digital assets for profit and the second is to use accounts, platforms and protocols to facilitate illicit transactions such as extortion payments, money laundering and sanctions evasion.
What is cryptocurrency?
A cryptocurrency is a type of virtual currency that uses cryptographic algorithms to control the generation of transactions using the currency. According to Pew Research Center, the number of users on cryptocurrency platforms, the number of platforms and the financial organizations leveraging cryptocurrencies have significantly increased in recent years, expanding the attack surface and number of potential victims for malicious actors. In 2021, researchers at the University of Chicago reported that 13% of Americans traded cryptocurrency in one year, compared to 24% of Americans who had invested in stocks in the same period of time. Cryptocurrency exchange Crypto.com reports indicate that there were approximately 221 million cryptocurrency users throughout the globe as of June 2021.