Want to weed out ransomware? Regulate crypto exchanges
Just between July 2020 and June 2021, ransomware activity soared by a whopping 1,070%, according to a recent Fortinet report, with other researchers confirming the proliferation of this mode of extortion. Mimicking the prevalent business model of the legitimate tech world, ransomware-as-a-service portals popped up in the darker corners of the web, institutionalizing the shadow industry and slashing the skill ceiling for wannabe-criminals. The trend should be ringing a warning bell through the crypto ecosystem, particularly since ransomware attackers do have a knack for payments in crypto.
That said, the industry that was once a Wild Wild West is now assuming a more orderly setting. Slowly but surely infiltrating the mainstream, it is now at the point where some of the largest centralized exchanges (CEXs) are hiring top-notch financial crime investigators to oversee their efforts against money laundering.
The problem is that not all exchanges are made equal. A centralized exchange works in many of the same ways a traditional business entity does, but this is not to say that all of them are now lining up to get their Anti-Money Laundering (AML) right. Things get even trickier with decentralized exchanges (DEXs), which, let’s face it, are not as decentralized as the name implies, but like to claim otherwise. In most cases, DEXs have little, if anything, in terms of Know Your Customer (KYC) measures, helping users hop between coins and blockchains at their leisure while leaving few traces. While some of them may utilize various analysis services to do background checks on wallets, hackers can try making their way around those by using mixers and other tools.
Related: DAOs are meant to be completely autonomous and
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