Cybercriminals are increasingly outwitting law-enforcement agencies, as the arrest rate is falling, according to Kaspersky boss Eugene Kaspersky,

“There was 2.5 times more malicious code in 2006 than in 2005, and the trend is continuing in 2007,” he said, on a visit to the UK. “But while there are more bad guys, less people are getting arrested. There’s been no breaking news for 2 years. They’ve all been arrested – now the bad guys behave in the shadow...little noise, but a lot of money.”

Cybercriminals have new techniques, including the use of “human proxies,” individuals who receive and pass on money gleaned from Internet crime, said the Kaspersky founder, in London to address the Infosecurity show.

“There’s no way to track the criminals. As soon as police track [human proxies] down, the gang breaks the chain and starts a new one.”

One of the biggest hurdles facing law-enforcement agencies is that Internet crime is increasingly a global business, and while police in various countries have made progress in cross-border relations, the various levels of bureaucracy in different countries often slows down attempts to track down those behind web scams.

“The victim may be in the UK, but the originator is elsewhere and you have to speak to various law-enforcement agencies in various countries, and some are better than others,” said Kaspersky. “If I was a hacker I’d love to have a proxy sever in Iran,” he added.

The Far East will provide the biggest threat over the next few years, according to Kaspersky. He had just visited China, where he claims his company is selling 5,000 security software products each day. “China will grow as a threat – this year there will be more Internet users in China than in the US. China will be number one as a maker of technology and number one in crimeware,” he said.

Other surveys agree that China is a global spyware hub, but Sophos has reported that China is cleaning up its spam problem.