DOD leaders warn AI, cryptocurrency ‘lowers the bar’ for cybercriminals

Top Defense Department officials focused on combating cybercrime said Thursday that artificial intelligence and cryptocurrency are making it easier for nefarious actors to threaten national security and circumvent traditional financial tracking systems.

The warning comes amid what the officials described as a rapidly changing threat environment, one that allows for low-level criminals to adopt sophisticated cyber exploitation methods and adversarial countries to obscure their actions, often in tandem.

“Cyber threats are no longer theoretical, episodic or isolated. They are persistent, adaptive and increasingly strategic,” according to Lesley Bernys, executive director of the DOD Cyber Crime Center. He said cyber groups operate with nation-state capabilities, acting as proxies for hostile countries to disrupt infrastructure, steal intellectual property and loot data.

“Artificial intelligence is accelerating all of it, lowering barriers to entry, while increasing speed, scale and precision,” he said during CyberTalks, presented by CyberScoop. Bernys, who is also an agent with the Air Force Office of Special Investigations, noted that cybercriminals use AI to automate phishing scams, create malware and amplify fraud.

Palo Alto Networks, a California-based cybersecurity company, released a report Tuesday that found online actors were using AI to accelerate their attacks, in some cases four times faster than last year.

Jeffrey Hunt, global operations branch chief for the DOD Cyber Crime Center, said cybercriminals are using virtual currencies to quickly transfer funds across borders while evading conventional banking systems meant to stop illicit financial transactions.

Cyber actors at the organized crime, cartel and nation-state levels can easily move cryptocurrency from “a single keyboard” to evade sanctions, launder money and buy illicit technology, he said. “It lowers the bar for them, which raises a challenge for us.”

He noted that virtual funds have their limits. At some point, criminals will revert to traditional currency to pay their collaborators.

To combat these transfers, Hunt said the Pentagon’s cyber crime center is first identifying a “known contact point,” such as evidence from a ransomware victim or a digital address from a previously-investigated cyber criminal, to expand investigations and analyze transactions.

Part of that analysis includes identifying activities from digital wallets, possibly from affiliates of a cyber group, to determine how much currency is going to foreign nation-states, for example. As cybercriminals automate their processes, he said, their methods become repeatable, which allows investigators to better understand how an actor’s money laundering works.

While Bernys warned about the threats AI poses to cybersecurity, he also said the technology can “be a force multiplier for defense, enhancing detection, accelerating analysis and helping investigators connect the dots that would otherwise be missed.”