Cyber-crime like other criminal enterprises is a business. Whether the criminal enterprise is selling drugs, gambling, or prostitution there is an underlying business model where sales minus expenses yields profits for the criminal enterprise. As state and local governments encroach on the criminal enterprise businesses including gambling (casinos and sports betting) and drugs (marijuana sales), criminal enterprises are looking for new growth opportunities.
What makes cyber-crime so attractive to criminal enterprises? There are a variety of reasons cyber-crime continues to grow at double digit rates. These include low barriers to enter, low capital costs to enter the business, and very low risk of prosecution. If a criminal enterprise’s lines of business are being legislated out of existence, a logical reallocation of capital would be into cyber-crime. The Dark Web is rich with web sites that for a fee, provide the software, control console and e-mail lists to put you in the crypto-locker business. Add in a network operations center in a friendly government jurisdiction to avoid prosecution, and you have a formula for making large sums of money. The establishment of a cyber-crime business unit is significantly less expensive, and easier then setting up a distribution network for drugs in a new region. Make a few key hires of technical talent and the criminal enterprise is on its way. Cyber-crime offers the perfect opportunity to expand quickly with fewer people and less risk.
The market in Cyber Crime is relatively small and fragmented today. As older established criminal enterprises reallocate capital and enter the market expect the growth rate to slow. With that slowing growth there will be signs of consolidations in the industry. Unlike corporate America where consolidations are marked by mergers and acquisitions, criminals use more forceful methods to dislodge competitors. So far, there have been few reports of cyber-criminals having turf wars. One sign of the cyber-crime market maturing will be reports of cyber-criminals using cyber weapons to attack each other all around the world, and for executives of “tech” companies around the world to go missing.
Expect the criminal threats to continue to grow into the foreseeable future with law enforcement and technology companies always playing catch-up.
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