Cybercrime on the Ethereum Blockchain
Publikation: Beitrag in Fachzeitschrift › Forschungsartikel › Beigetragen › Begutachtung
Beitragende
Abstract
We examine how cybercrime impacts victims’ risk-taking and returns. The results from our difference-in-differences analysis of a sample of victim and matched non-victim investors on the Ethereum blockchain are in line with prospect theory and suggest that victims increase their long-term total risk-taking after losing part of their wealth, leading to lower risk-adjusted returns in the post-cybercrime period. Victims’ long-term total risk-taking increases because they increase diversifiable risk due to victims’ post-cybercrime withdrawal from altcoins. At the same time, the reduction in risk-adjusted returns correlates with increased trading activity and churn, due plausibly to managing cybercrime exposure. In the cross-section of Ethereum addresses, we show that the most affluent victims take a systematic approach to restore their pre-cybercrime wealth level, while the least affluent victims turn into gamblers. Finally, a parsimonious forensic model explains a good part of the addresses’ probability of being involved in cybercrime, on both the victim and the cybercriminal side.
Details
Originalsprache | Englisch |
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Aufsatznummer | 107419 |
Fachzeitschrift | Journal of Banking and Finance |
Jahrgang | 175 |
Frühes Online-Datum | 8 März 2025 |
Publikationsstatus | Elektronische Veröffentlichung vor Drucklegung - 8 März 2025 |
Peer-Review-Status | Ja |
Externe IDs
ORCID | /0000-0002-0576-7759/work/142239320 |
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unpaywall | 10.1016/j.jbankfin.2025.107419 |
Scopus | 105001824259 |