Crypto-Related Crimes Will Surpass All Other Cyber-Crimes In 2018 – Israeli Intelligence Analyst

Blockchain, Crime, News | June 25, 2018 By:

Lotem Finkelsteen, an Israeli threat intelligence analyst, has warned that crypto-related crimes, including financial scams and hacking, will surpass all other types of cyberattacks in 2018.

Speaking on a panel at the “Blockchain, The New Digital Age” event at Tel Aviv University, Finkelsteen argued that illegal activity in the initial coin offering (ICO) market is the main obstacle to the development of blockchain technology.

“Not a day goes by without our hearing about a new ICO scam or mining attack,” Finkelsteen said. “Blockchain is suffering from reputational damage, and that is one of the main obstacles for blockchain technology to move forward.”

While other panelists at the event were more optimistic about the positive potential for blockchain technology, Haim Pinto, the CTO of Israel’s largest bank Hapoalim, argued that blockchain is still in a hype cycle and is not yet ready for widespread adoption. Pinto added that the technology presents a challenge for banks seeking to comply with the EU’s “right to be forgotten” laws, which require that businesses erase clients’ sensitive personal data if they are asked to do so.

“Distributed general ledgers cannot erase anything,” Pinto said. “That’s just one of the challenges. In addition, there are mathematical challenges. Distributed general ledgers can’t scale up to the volume of transactions we need to serve.”

During the event, Tel Aviv University Economics professor Neil Gandal presented a paper called “Price Manipulation in the Bitcoin Ecosystem” that he and his colleagues first published in January. The paper alleges that the first bitcoin boom back in 2013 was caused by one trader using trading robots. Gandal also argued that bitcoin’s more recent price spike, when it reached close to $20,000 last year, was also caused by price manipulation.

“It’s possible for a small number of actors to manipulate things,” Gandal said. “We need some sort of regulation [of cryptocurrencies]. “There is a loss of confidence in the system.”