Cryptocurrency theft remains a huge problem throughout the space, and quarter one of 2019 is already off to a rough start.
Crypto Crime Is at Its Worst
According to a new report released by cybersecurity firm Cipher Trace, more than $1.2 billion in crypto funds have been stolen in just the first three months of the year. Losses from hackings and fraudulent activity appear to be at an all-time high, and citizens need to take preventative measures, so they and their funds can remain protected.
Cipher Trace also comments that the total amount of cryptocurrency stolen in 2018 through cyberattacks was $1.7 billion. That means in the first three months of the new year, we’re just shy of hitting that tally (less than $.5 billion). The company says that crime has predominantly sped up as the market has slowed and business activity in the cryptocurrency space has become less common and prosperous.
In all, approximately $356 million has been stolen from various exchanges, while misappropriated funds or fraud directed at individuals accounts for more than $850 million in losses. This includes losses derived from the recent Quadriga X scandal that occurred last December. The owner of the Canadian company was ultimately found dead in India. He was the only one with the login information necessary to unlock the funds in customers’ accounts.
Cipher Trace chief executive officer Dave Jevans comments:
Crypto crime has gotten worse because regulations are still weakly enforced. Europe broadly has not implemented its regulations yet, and the cybercriminal community continues to grow. I would also add that insider issues such as fraud or theft have grown mostly due to operations outside of the U.S. where regulations are poor, or simply due to greed and mismanagement by young management teams at these cryptocurrency companies that are managing hundreds of millions or even billions of dollars.
At one point, attacks like Mt. Gox and Coincheck appeared to be at the top of the crypto theft game, though these attacks and others are now small beans when compared to the growing numbers of losses that have been accumulating since 2018.
Mt. Gox and Coincheck occurred roughly four years apart, and both took place in Japan. Mt. Gox occurred in February 2014, while Coincheck was attacked in January 2018. Both exchanges lost well over $400 million in cryptocurrency funds. Altogether, both companies account for roughly $1 billion in total losses.
Is This Going to Stop?
Coincheck was enough for Japan to get the Financial Services Agency (FSA) involved in regulating crypto activity. It began sending nasty letters to all exchanges that did not meet present security standards.
Cipher Trace comments that there was also “a major gap” in the crypto regulatory environment with regards to cross-border payments from the U.S. to international crypto exchanges. These companies are often not monitored or examined by U.S. authorities.