Where the Money Is

When I interview people from a US law enforcement background, it is clear that the Willie Sutton legend has a special place in their hearts. The story goes that a reporter asked Sutton, an infamous bank robber from the mid-twentieth century, why he robbed banks. Sutton’s reply was to the point: “because that’s where the money is”. Leaving aside the fact that Sutton may never have actually uttered these words, for many the “Sutton principle” has become essential for understanding contemporary cybercrime. The money is now moving online, so it’s only natural that crime would migrate there too.

Cybercrime has come a long way since the early days of hacking, with its focus on intellectual curiosity and recreational pursuits. The first hackers were creative problem solvers and pioneers, experimenting with a new frontier. A strong sense of openness, freedom and information sharing defined their world… and sometimes a degree of mischief. But those “golden years” are largely in the past now. While some hobby hackers still remain and hacktivists continue to operate with great visibility, there is no doubt that cybercrime has become big business. It is a difficult to precisely estimate how much business is being done…but it’s a lot!

Cybercrime has “corporatised”, adopting a strong profit-motivation, greater organisation and a sense of professionalism. While there was some money-making to be done in earlier days, much of this turn to profit began to emerge at the end of the 20th century. Online theft of credit card data was one of the first major prizes for economically motivated hackers. With the birth of cybercriminal trading forums like CarderPlanet in 2001, where online criminals could meet, share information and trade stolen credit card data among other illicit goods/services, a real market had emerged.

Cybercriminal forums demonstrate that what began as world centred on hackers, has now evolved into an industry that includes a wide range of people who perform a wide range of functions, some without strong computing skills at all. There are still elite coders but also business savvy front men; there are bot herders (who control botnets) but also “cashing out” specialists who may have a toe in more traditional forms of crime. Cybercriminals have become increasingly professional and, for many, the old hacking ethos seems to matter little as the call for profit takes over.

So how did this corporatisation of cybercrime take place? One model might be found in the corporatisation of street gangs in the United States. About fifteen years ago the sociologist Sudhir Venkatesh and the economist Steven Levitt famously noted a shift that took place in Chicago gangs: they had moved away from the social activities and minor delinquency that previously defined them, towards a more organised criminal network, with a strong hierarchy, clearly defined roles and a spirit of entrepreneurialism. Some gangs were even keeping books accounting for all their financial activities, just like a regular business. The introduction of crack cocaine onto the market in 1986 appeared to be the key driver behind this shift. Crack was cheap, highly addictive and well suited to distribution by gang networks with widespread street presence and control over local “turf”. So a number of gangs gradually altered their DNA and went where the money was.

There is no doubt that some of “the money” is now on the Internet and cybercriminals are capitalising on this opportunity. This “money” is essentially performing the same role that crack did for street gangs. The massive shift of business operations and financial and other personal data into cyberspace in recent years has created enormous profit-making potential for those who have, or want to develop, the right skills. Some are old school hackers adapting to a new world of opportunity, but others have little connection to that world and have come for the money alone. In either case, they have increasingly developed their organisation and operations for business functions.

But “the money” being on the Internet is not the sole explanation for how cybercrime has corporatised. One other key factor is that the architecture of the Internet needed to evolve to allow greater online congregation and collaboration. For instance, one former hacker I spoke with, who operated in Britain in the 1980s before hacking had been criminalised, had very little collaboration with other hackers. What collaboration he did have with his hacker friends was offline: meeting for meals every few months to discuss their activities and “share passwords”. At this early point there were few alternatives, as the Internet had not been developed in the way that it is now and there were hardly any online meeting places, such as forums and encrypted chat rooms. Even with an increased drive for profit, greater cybercriminal organisation could not have taken place without the online means for doing it.

Finally, an increase in Internet security in recent years paradoxically may have made hobby hacking more difficult and pushed cybercrime further towards the profit-driven professionals. A former American hacker I have interviewed suggested it was becoming increasingly difficult to operate as a pure hobby hacker who didn’t have financial motivations. When this hacker was operating as a high schooler in the 2000s, security was much more lax and it took little experience for successful hacks. But now that the security situation has tightened up considerably, he believed there has been a major decline in the number of hobby hackers around, as it’s simply not worth the trouble any more. Exploits are only useful for a very short period of time, before the security industry is onto them, so “you better make a ton of money off it and move off to something else…”

This is a summary of a paper titled “The Corporatisation of Cybercrime” presented at the ECPR General Conference 2013 in Bordeaux.