Thursday, 22 October 2020 11:10

PayPal move on digital currencies will make cyber criminals richer: claim

PayPal move on digital currencies will make cyber criminals richer: claim Image by CeruleanSon from Pixabay

The move by worldwide online payments system PayPal to allow customers to hold bitcoin and other virtual currencies in their online wallets will end up making more than a few cyber criminals richer, a senior technologist has claimed.

Chester Wisniewski, principal research scientist at Sophos, said: "PayPal entering the cryptocurrency market is unfortunately going to make more than a few cyber criminals a little bit richer."

PayPal announced on Wednesday that it would also allow customers to use the digital currencies they held for shopping at the 26 million merchants on its network.

Initially, the company said, it would allow the use of bitcoin, ethereum, bitcoin cash and litecoin, and the service would be available to American account holders in the next few weeks.

PayPal said it planned to expand the features to Venmo and select international markets in the first half of 2021 with the service enabled in the US through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services

The online payments firm said the mainstream adoption of cryptocurrencies had been hindered by their being limited as instruments of exchange due to volatility, cost and speed of transaction.

But it said the progress of technology held out the promise that digital currencies would become mainstream in the not-too-distant future. It cited a Bank of International Settlements survey as having found that one in 10 central banks expected to have a digital currency within three years – covering about a fifth of the world's population.

PayPal president and chief executive Dan Schulman said: "The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.

"Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.

"We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce."

But Wisniewski was not convinced the move would have any positives. "Many criminals hold reasonable amounts of bitcoin from ransomware payments and nefarious activities they are doing on the dark web," he pointed out.

"I'm sure these cyber criminals are happy PayPal has made them 7% to 11% richer today."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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