'Cybercrime exceeds drug trade' myth exploded

This is a little dated (from Mar 29, 2009), but thought it was interesting enough for a repost here. It's from: http://www.theregister.co.uk/2009/03/27/cybercrime_mythbusters/

A leading security researcher has unpicked the origins of the myth that revenues from cybercrime exceeds those from the global drug trade, regurgitated by a senior security officer at AT&T before Congress last week.

Ed Amoroso, Senior Vice President and Chief Security Officer of AT&T, told a Congressional Committee on 20 March that cybercrime was a $1trn a year business. It'd be nice to think that Amoroso had been misquoted or made a slip of the tongue but written testimony from Amoroso repeats the amazing claim, made before a hearing of the Senate Commerce, Science, and Transportation Committee.

The end of paragraph 5 of the written submission states:

Last year the FBI announced that revenues from cyber-crime, for the first time ever, exceeded drug trafficking as the most lucrative illegal global business, estimated at reaping more than $1 trillion annually in illicit profits.
As Richard Stiennon points out the quoted figure would make cybercrime bigger than the entire IT industry. The top 10 Fortune 50 firms turned over $2trn last year.

Put another way, revenues from cybercrime exceed those of AT&T itself ($119bn in 2008) by a factor of around eight.

Estimates of the drug trade peg annual revenues at about $400bn. There's no figure on this from the FBI much less a comparative figure comparing cybercrime and drug trade revenues, despite what Amoroso said.

Stiennon, chief research analyst at IT-Harvest, guesses that cybercrime profits might be worth about $1bn a year, which seems much more plausible.

You'd have to be on something truly mindblowing to think that cybercrime revenues exceed the GDP of Saudi Arabia ($555bn in 2007), with all its oil income.

How could anyone ever think such a thing? Stiennon comes up trumps in tracking down the origin of this meme.

The idea that cybercrime revenue trumps that of the drug trade were first mentioned by Valerie McNiven, a consultant to the US Treasury Department in November 2005. The figure cited at the time was the still-implausible $105bn, Stiennon reports.

The same figure, mentioned by a lawyer to a Reuters stringer and henceforth enshrined in clippings harvest by the PR departments of security firms, reappeared again in a September 2007 speech by the chief exec of McAfee, David DeWalt.

Eighteen months later the meme has grown so that the figure cited is $1trn but, as Stiennon points out, the form of language is virtually identical. Earlier this week security firm Finjan published a press release ("Finjan confirms cybercrime revenues exceeding drug trafficking") supporting the myth, most recently relayed by Amoroso before Congress.

We asked Finjan whether it wanted to rethink what it said. Not a bit of it, the security firm responded.

"In our Q1 2009 report on cybercrime, for example, we revealed that one single rogueware network are raking in $10,800 a day, or $39.42 million a year," it said. "If you extrapolate those figures across the many thousands of cybercrime operations that exist on the internet at any given time, the results easily reach a trillion dollars."

You can observe the ongoing capers of this implausible FUD-laden cybercrime revenues meme in Stiennon's posting on the ThreatChaos blog here. ®

Bootnote
We're aware that even leaving aside Finjan's head-spinning statistical assumptions its figures still don't stack up. When we called it to ask if it wanted to reconsider its earlier statement, contained in a press release but not published on its website, in light of Stiennon's criticism it answered that it was sticking by its guns.