Crypto-jacking: Theft or Fraud?
Crypto-jacking: Theft or Fraud?
Written by Anthony Cheung, Bar Professional Training Course (BPTC).
The rise of cryptocurrencies has led to a sudden explosion in appetite for digital currencies, resulting in creative approaches to the ‘mining’ of cryptocurrencies. However, like all technological leap, a void is created in the law; allowing avenues for misuse and confusion. Within that void, crypto-jacking was created.
Crypto-jacking is the secret use of a computing device to mine cryptocurrencies. Without needing the target to download any software, the elusive individual simply requires the victim to stumble upon contaminated websites with their mobile or other computing devices. From there, the victim’s device is hijacked and its computing powers added to the elusive individual’s covert operation of ‘cryptocurrency mining’. The only snippet of clue that your device has been compromised is the slow computer processing and the extreme heat generated by the device. The technique is commonly used on websites like Pirate Bay; however, such use is yet to be deemed a criminal offence by Parliament.
Mining, essentially, is computer accounting. Cryptocurrencies like Bitcoin requires individuals to perform bookkeeping tasks to ensure the system is up to date with members’ transactions. An award, normally in the form of the cryptocurrency, is given to the individual for updating the public ledger. The process of mining requires a lot of computing power and energy, so the more computer processing power an individual has, the quicker the person can mine and the more digital currency they can earn as a result of providing the bookkeeping service.
As I have already eluded, the use of crypto-jacking is not a criminal offence in itself. Nevertheless, its creation does produce a level of uncertainty within the Criminal Law, and may lend itself to the potential evolution of dishonest offences like theft and fraud.
In the first scenario, a victim may allege that the elusive individual stole their award for the mining. To succeed, prosecution would need to demonstrate the elements of theft, which are: dishonesty; appropriation; property; belonging to another; and intention to permanently deprive. The elusive individual’s covert operation would undoubtedly be considered dishonest. As stated, the general procedure is for the ‘miner’ to be awarded the cryptocurrency for their part in the book-keeping service. The fact the award is withheld by the elusive individual means not only is the property, the cryptocurrency, permanently deprived from the victim, but also, the elusive individual did so intentionally.
However, the major hurdle is demonstrating appropriation, which could occur in two instances: before and after the award. If it is before the award, then no appropriation could take place. A person cannot appropriate property that does not exist, nor can they appropriate property that does not belong to them. Thus, arguing appropriation before the award would be a fruitless endeavour. If it is after the award then there are two further independent issues. Firstly, demonstrating the existence of the digital currency would be a challenge because there are no ways in identifying where the cryptocurrency has gone or the account it has been deposited to, unless the elusive individual reveals themselves. The next problem is demonstrating our property rights on the item. As explained, the cryptocurrency moves directly from the source to the elusive individual’s account before any property rights can be asserted by the victim. As shown, the task of prosecuting crypto-jacking under theft is an onerous one.
If the prosecution cannot be based on theft, can the issue of fraud prove a stronger case? Fraud can be committed by false representation, by failing to disclose information, or by abuse of position. The predicament is the necessary evidence required to support the second limb of the offense – make a gain for himself or cause loss to another. The lack of central supervision and anonymity incorporated into the cryptocurrency system makes tracking any transaction or gain difficult. The task in proving loss is equally troublesome because the victim would need to identify their device within the mining operation; which could consist of hundreds or even thousands of devices. Then within that group, demonstrate the loss suffered as a result of the fraud. Thus, fraud may provide a potential avenue, but the frustration in demonstrating the second limb beyond reasonable doubt cuts short any advances.
Unsurprisingly, cybercrime is a complex area to prosecute. There are needs for the control and regulations of new computing techniques to ensure public safety. Arguably, the Judiciary are best suited to deal with such matters as any regulations or legislations would take amble of time to get through Parliament. Areas where the borders are not properly defined only creates a minefield for criminals to hide in, and such confusion can only be a detriment to society.
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