Anonymity in Bitcoin has not only benefited innocent crypto users inasmuch that the same veil hiding the identity of the people behind transactions is also a boon for criminals. Gone are the days when extortionists want to be paid in fiat since Bitcoin masks them from their takings with an alphanumeric virtual address.

Such a case is the Bitcoin ransom in Johannesburg, where hackers took control of its cyber networks since last Thursday. The hackers are asking for four BTC equivalent to 500,000 thousand rands or about $34,000 -- not much considering the hackers gained access to the computer system of a city with 5 million people. The South African city had until Monday to pay.

But the time has run out to satisfy the cybercriminals with council member Funzela Ngobeni opposed to the idea of succumbing to such requests.

"The city will not concede to their demands for bitcoins, and we are confident that we will be able to restore systems to full functionality," Ngobeni said in a statement.

Ngobeni even termed the breach as an "attack on the people of the city" because it occurred when residents were accomplishing utility payment dues and when the council was paying its vendors.

As a way to prevent hackers from gaining more access to their electronic platforms, including billing and payment, authorities have shut down the city's entire systems. Citizens were also asked to pay by cash or use third party payment platforms for paying bills until the authorities fix the issue.

So far, 80 percent of the Johannesburg system is back online, but the perpetrators are left unidentified.

Spam and Crypto Combination

Another case where Bitcoin is the preferred currency for extorting money is the spam and crypto combination. A team of researchers from GoSecure, Austrian Institute of Technology, and Excello concluded that spam and crypto make a perfect blend for a lucrative strategy to extract money from unsuspecting email users.  The team surveyed over 4.3 million emails.  

The MO is a simple threat to a spam recipient of releasing compromising photos or videos if Bitcoin is not put forth as payment.  One sample email revealed by the study says:

"Hello! As you may have noticed, I sent you an email from your account. This means that I have full access to your account. I've been watching you for a few months now. The fact is that you were infected with malware through an adult site that you visited."

Surprisingly, it converts pretty well revenue-wise but could be largely attributable to the use of crypto, according to GoSecure’s Masarah Paquet-Clouston in speaking at last week's Advances in Financial Technology conference in Zurich.

Crypto currencies, despite regulatory grey areas, have been gradually making inroads into commerce in recent years with bitcoin leading the way Crypto currencies, despite regulatory grey areas, have been gradually making inroads into commerce in recent years with bitcoin leading the way Photo: AFP / Justin TALLIS