CybersecurityHow cybercriminal spend their illicit gains

A University of Surrey Senior Lecturer in Criminology has teamed up with virtualization technology company Bromium to produce “Into the Web of Profit,” a research study revealing the socio-economic and spending differences among cybercriminals.

Bromium, a specialist in application isolation using virtualization-based security, have announced the findings of an independent, academic study into how much money cybercriminals are earning, and what they spend it on.

The findings are part of a larger 11-month study titled Into the Web of Profit, commissioned by Bromium and written by Dr. Mike McGuire, Senior Lecturer in Criminology at the University of Surrey. It draws on first hand interviews with convicted cybercriminals, data from international law enforcement agencies, financial institutions, and covert observations conducted across the Dark Web.

Surrey says that research in the report reveals how income and spending are almost cliché. While cybercriminals do not have to pay taxes on their income, their annual earning level might push them into some of the higher brackets.

· High earners make up to $2m/£1.4m – almost as much as a FTSE250 CEO

· Mid-level criminals make up to $900,000/£639,000 – more than double the U.S. presidential salary

· Entry level hackers make $42,000/£30,000 – significantly more than the average U.K. graduate.

Data gathered through first-hand interviews with 100 convicted or currently engaged cybercriminals, combined with Dark Web investigations, reveals that:

· 15 percent of cybercriminals spend most of their money on immediate needs – such as buying nappies and paying bills

· 20 percent of cybercriminals focus their spending on bad habits – like buying drugs or paying prostitutes

· 15 percent of cybercriminals spend to attain status, or to impress romantic interests and other criminals – for example, buying expensive jewelry 

· 30 percent of cybercriminals convert some of their revenues into investments– such as property or financial instruments, and other items that hold value such as art or wine

· 20 percent of cybercriminals spend at least some of their revenue on reinvestments in further criminal activities – for example, buying IT equipment.

The report notes a growing market catering to cybercriminals by allowing them to buy things with virtual currency. Sites such as White Company, Bitcoin Real Estate, and de Louvois offer luxury products priced in Bitcoin, which is becoming a concern for financial analysts.

McGuire said: “The range of spending habits among cybercriminals was fascinating. A lot of cybercriminals spend their money on increasing their status, whether that be with peers or romantic interests. One individual in the U.K., who made around £1.2m per year, spent huge amounts of money on a trip to Las Vegas, where he claimed to have gambled $40,000 and spent $6,000 hiring sports cars so that they could “arrive in style” to casinos and hotels. Another U.K. cybercriminal funneled his proceeds into gold, drugs, expensive watches and spent £2,000 a week on prostitutes. It’s alarming how easily cybercriminals are able to spend their illicit gains – there is an ever-growing market that is almost tailor-made for cybercriminals to make these ostentatious purchases with little to no regulation or oversight.”

— Read more in Michael McGuire, “Into the Web of Profit: Tracking the Proceeds of Cybercrime” (paper presented at the RSA Conference, San Francisco, 20 April 2018). Register to download the full report: learn.bromium.com/rprt-web-of-profit.html