A new report has found that cryptocurrency theft through hacks or exchange platforms rose 250 percent from 2017, reaching $927 million in the first nine months of 2018.
Attracting Criminals
The report was conducted by CipherTrace, a cybersecurity firm. Previous research from the company found in 2017 that the total theft of cryptocurrencies amounted to $266 million, reports Reuters.
The latest study also showed that there was a rising number of smaller thefts. These reached between $20-60 million, totaling $173 million in Q3 2018. The growth of the crypto market has seen an increasing number of scams hitting it.
Scammers realize the potential the cryptocurrency ecosystem has. As a result, they are targeting people to get their hands on the coins. Not only that, but exchange hacks has seen an increase as well. In January, it was the hack of crypto exchange Coincheck, based in Tokyo, which saw its regulator take a firmer stance to the industry.
Speaking to Reuters, Dave Jevans, chief executive officer of CipherTrace, said:
The regulators are still a couple of years behind because there are only a few countries that have really applied strong anti-money laundering laws.
Additionally, Jevans stated that there are probably around 50 percent more criminal transactions than what was mentioned in the report. The findings also showed that of the top crypto exchanges with poor anti-money laundering (AML) regulations, they have been used to launder $2.5 billion worth of Bitcoin since 2009. Such exchanges were not named in the report.
Jevans added:
All exchanges get these money-laundered funds. You really can’t stop them. And here’s the reason why. We learn about the criminal stuff often times after it actually happened. So there’s no way to know in real time. You can know 80-90 per cent of the time, but it’s impossible to know 100 percent.
Last month, it was reported that a man behind a $1.8 million crypto theft was sentenced to 10 years in prison after pleading guilty.
ICO Threat
Another factor in the crypto market that is becoming a concern is initial coin offerings (ICOs). These, too, are presenting a problem.
So much so, that in August, a report noted that almost $100 million had been lost to ICO exit scams. It’s unsurprising then that many global regulators are calling for them to be banned or regulated.
Of course, while the market remains lucrative to potential scammers, they are unlikely to stop.
How much higher do you think the theft of cryptocurrencies will rise by the end of 2018? Let us know in the comments below.
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