Sextortion Linked to Bitcoin Money Laundering Site

Published: 16 November 2018

sextortion

The FBI has seen an increase in the number of sextortion attempts reported in recent months. (Photo by Arielle Vasquez)

By Lydia Osborne

Sextortion — a scam in which hackers claim to compromise a user’s computer, record them watching pornography via their webcam, and threaten to release the video online if the victim does not meet their demands — has been linked to the Bitcoin money laundering site Bitblender.io.

The demand is often a Bitcoin ransom, and crypto news sources reported Tuesday that scammers allegedly launder their extorted proceeds through Bitblender.io, a Dark web site that renders Bitcoins untraceable.

Sextortion scams have been plaguing the internet and troubling law enforcement for well over a decade. Federal prosecutors and child safety advocates have been worried about the uptick in online sexual exploitation since as early as 2010, and this year the FBI reported an additional 13,000 complaints about sextortion scams in July over all previous months.

In the current iteration of this longtime con, criminals are emailing users with the same threats of public sexual embarrassment, but with a new twist.

The message opens by referencing a real password tied to the victim’s email address to make the threat seem more credible, even though the scammer may not actually possess any explicit material of the victim.

The victim’s usernames and passwords were likely stolen in a data breach from a popular website, according to crypto attorney Dr. Jon Levy, after which criminals can purchase them from the Dark web, Null TX reported.

The scammers then return to the Darknet to clean their crypto ransoms through Bitblender.

Bitblender’s website claims to effectively erase Bitcoin blockchain history, making sketchy transactions completely anonymous and creating a safe haven for crypto scammers and criminals.

Levy, who is representing several plaintiffs suing Bitblender, estimates 99 percent of Bitblender transactions are criminal and that over a billion dollars have been laundered through the site.

The .io domain falls under the jurisdiction of the British Indian Ocean Territory.

“The responsibility for much of this is with the British Foreign and Commonwealth office which is in charge of British Indian Ocean Territory and ultimately the .io domain,” Levy said, according to the Bitcoin Exchange Guide.

“It is the British who must take out these crypto pirates.”