A Kenyan college gang has been hacking into people’s credit cards through email phishing and using the money to buy bitcoin, according to the country’s directorate of criminal investigations (DCI).
The gang based its criminal operations in Milimani, an upscale estate in Nakuru, a city located 161 km from the capital Nairobi. Email phishing involves the use of emails as baits to steal card numbers and passwords.
“Francis Maina Wambui Alias Nick, 26, and Zellic Alusa, 25, both students at Kenyatta University were arrested during the raid in the company of two young ladies,” DCI says.
Five laptops, four smartphones, two wifi gadgets, three hard drives, and assorted SIM cards were recovered during the arrest.
The gang targets credit cards of people living in foreign countries but Kenyans have also lost money from banking-related cybercrime. Total losses rose from $210 million in 2017 to $295 million in 2018.
The scammers use the money to fund lavish lifestyles and purchase property. Among the documents recovered in the house was a land sale agreement entered on May 25, for a property valued at $8,000 in Juja, a 21-minute drive from Kenyatta University.
Even as the world experiences a crypto crash, seeing market valuation going down by 30% since last week and crypto firms halting withdrawals, crypto still remains attractive for hackers looking to conceal their crimes. The Nakuru hackers withdraw the bitcoins in Kenya shillings.
Around the world, fraudsters are increasingly using bitcoin and other cryptocurrencies to launder money. A report by Chainalysis shows that in 2021, criminals laundered $8.6 billion in crypto. They take advantage of the anonymity cryptos provide to cover up the origin of illicit funds.
Just three days before the raid, the Kenyan government launched a cyber forensic lab to curb the use of modern technology to conduct criminal activities. However, Kenya’s war on cybercrime has been weakened by poor legal structures where prosecutors and judges struggle to understand sophisticated cyberattacks.
In recent years, Kenya has been a hacking hotspot in the eastern Africa region. In 2019, eight Kenyans were arrested in Kigali, Rwanda while attempting to hack into the payment systems of Equity Bank, the region’s largest bank in assets and deposits. In 2017, a computer expert was charged with hacking into the Kenya Revenue Authority database and stealing $39 million.
Last November, a 22-year-old man was arrested in Bomet—a town located in Kenya’s riftvalley—for hacking 481 bank accounts and making away with $400,000. Two hackers were arrested in 2020 for gaining unauthorized access to the National Transport Safety Authority which allowed them to launder cars.
According to the country’s Computer Misuse and Cyber Crimes Act, anyone found guilty of manipulating a payments system to steal money is only jailed for two years or fined $2,000.
Kenyan banks are losing over $121 million every year to fraudsters through identity theft according to a 2021 digital fraud report by Credit Reporting agency, TransUnion.