Future Crimes Enabled by Blockchain-Based Technologies

Dr. Roey Tzezana, Research fellow in Yuval Ne'eman Workshop, Tel Aviv University;

Blockchain technologies are widely accepted to be the ‘future of the internet’. These technologies form the basis for Bitcoin’s continued existence and success, ensuring that the digital coin system is secure and fraud-free. All the same, some individuals have already discovered ways to manipulate both the bitcoin’s value and to hack into related systems to successfully steal digital coins worth hundreds of millions of dollars. Other cyber-criminals took control of Amazon’s powerful web services platform and utilized it to mine bitcoins for themselves, and the list of crimes perpetuated on blockchain-based platforms just keeps getting longer every month.


While Bitcoin is the main blockchain-based technology that has gained popularity and public recognition, other blockchain-based platforms are sprouting up by the day. They are usually supported by ICOs – Initial Coin Offerings – which are used to raise hundreds of millions of dollars. In 2017 alone, startups made use of ICOs to raise $5.6 billion. However, almost 10% of the money raised on the most popular blockchain-based platform for start-ups, ended up being stolen using four main methods: exploits, hacks, phishing and Ponzi schemes.


Furthermore, blockchain-based platforms are set to enable a new kind of cloud-organizations, called DAOs – Decentralized Autonomous Organizations. These ‘organizations’ will in fact be composed of a series of blockchain-based smart contracts that will organize human activities and decision making. One of the best known DAOs, for example, simply called The DAO, was created to allow its members to consolidate their resources and invest together in other start-ups, while making sure the profits are distributed among the investors according to their level of investment. The DAO raised over $150 million in 2016 – only to have 3.6 million ether, corresponding today to more than $3 billion, stolen from it by a cyber-criminal who exploited a vulnerability in the code of The DAO.

Even if DAOs turn out to be resistant to cyber-crime and external hacking, their mere existence enables old crimes to be performed in new and befuddling ways. Consider, for example, the Augur DAO, which is a blockchain-based decentralized prediction market – but which others believe has the potential to become “the greatest gambling platform in history”, and which may exist and operate outside of the confines and rule of law of any national government. Augur has already been utilized as an “assassination market”, in which people can essentially promise a large payoff for assassinating a certain public figure – with U.S. president Donald Trump being one of the first to have a price on his head.


Other DAOs could be conceived of, which may actually be used to incentivize the public to commit terrorist attacks or hatred crimes, by autonomously delivering money to the perpetrator – with the money coming from thousands of anonymous contributors, and with the government incapable of taking control over the platform or the funds being delivered.


This state of affairs suggests that criminals, hackers and even terrorists are not only contemplating the use of blockchain-based technologies, but are already perverting and hacking currently used platforms. As blockchain-based technologies are only expected to keep on evolving, and the market is expected to grow dramatically, it is critical to conduct research about potential future crimes that could make use of and rely on blockchain-based technologies. Such future crimes need to be considered and analyzed in advance in order to have a prepared response by regulators, law-enforcement bodies, and professionals working in these fields.


In this research we will develop a better understanding of the security measures and regulations needed to combat the new criminals and crimes, by studying the potential criminal acts that blockchain-based technologies could be used for. We will conduct expert surveys and interviews to create an analytical framework for such crimes, and develop scenarios and policy recommendations. 

Tel Aviv University, P.O. Box 39040, Tel Aviv 6997801, Israel
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