Nowadays, cryptocurrencies–like bitcoin –are commonly used in a variety of cybercrimes.
Bitcoins are used in both:
(1) cyber enabled crime, i.e. crimes that are enabled by computers and the Internet
(such as hacking and malware); and
(2) cyber assisted crime, i.e. criminal behaviours in which computers and the Internet
assist in committing crimes (such as drug trade on online forums) (McQuade, 2002;
Burden and Palmer, 2003).
In both types of cybercrime, bitcoin can be seen as an enabler of the digital criminal
enterprise. The main instigators of their popularity among cybercriminals is that they are
straightforward to use, relatively anonymous, and their use is unimpeded by borders or
legislation (Shcherbak, 2013;Bryans, 2014). Steadily, bitcoin has proven itself to be a vital
part of the criminal enterprises. For instance, ransomware victims are pressed to exchange
the ransom from ﬁat currency to bitcoin and transfer this amount to a speciﬁc bitcoin
address that is provided by the criminals.On underground markets, large amounts of goods
and services –like drugs, weaponsand DDoS-attacks –are bought and sold using bitcoin as
method of payment. In online undergroundmarkets, bitcoins are therefore to be seen as the
preferred currency of criminals (Motoyama et al., 2011;Sood et al., 2013;Moore and Rid,
2016). And recently, criminalsstart to embrace bitcoin as a partner in their cash-out strategy
and launder money aidedby bitcoin (Möser et al., 2013).
Criminals need a solid cash-out strategy to launder cybercrime proceeds, in this case
bitcoin, without getting connected to the associated crime (Levi, 2015). A cybercriminal
seldom starts his cash-out with bitcoins. Usually, his cybercrime proceeds exist of ﬁat
currency, such as euros or dollars. Regardless of the source, nature and size of the
cybercrime proceeds, the bitcoinecosystem is used as part of the anonymisation or layering
process a cash-out strategyentails. Already upon exchanging these proceeds forbitcoin, the
money trail becomes obfuscated(Europol, 2015c).
On the Dark Web, services are being offered to anonymize bitcoins even further, by
mixing them, or in this case –launder them. Two key components in this “bitcoin
laundering”are bitcoin mixers and bitcoin exchanges (Moore and Christin, 2013;Möser
et al., 2013;Christopher, 2014;Brenig et al.,2015). Bitcoin mixing services are services that
aim to disassociate bitcoins from their often-criminal source. Bitcoin exchange services are
services that aim to anonymously convert bitcoins to spendable money. In this paper, we
focus on the use of the cryptocurrency bitcoin facilitating the cash-out and laundering of
Until now, there is little experimental, empirical research into the working of these
bitcoins mixers, let alone explorativeresearch into its usability for cash-out strategies. Only
Möser et al. (2013) tested ﬁve bitcoin mixers to analyse their technical method of operation.
But how do you identify and select a reputable service? And what percentageof your crime
proceeds do you “lose”in the launderingprocess? To answer those and similar questions, we
set-up an experiment that in addition to testing the mixers itself, illustrates a cash-out
strategy using bitcoin mixers. The experiment will allow us to further determine the
likeliness of integration of these potential criminal strategies in an actual criminal scheme.
Doing so, we were able to analyse these cash-out strategies, as it would provide an
opportunity to study how the different elements of such a strategyare connectable and how
they operate together as a (successful)cash-out strategy.
The goal of this paper is not only to test the method of operation of bitcoin mixers but
also to make a ﬁrst attempt to identify the usability of these mixers in a cash-out strategy.