Global cryptocurrency crime soars $4.4 billion in losses in first nine months

BEIJING, Nov. 28 (Reuters) – A report from blockchain depository company CipherTrace shows a sharp rise in cryptocurrency theft in 2019 compared with last year. As digital exchanges deal with more and more money, criminals are also looking for larger thefts.

Global cryptocurrency crime soars $4.4 billion in losses in first nine months

Losses from digital currency crime rose sharply to $4.4 billion in the first nine months of 2018, up more than 150 percent from $1.7 billion for the whole of 2018.

Dave Jevans, CEO of CipherTrace, said: “The 150 per cent increase in cryptocurrency theft and fraud shows that criminals are adjusting to a larger scale. Criminals chase money, and money is here. The time is ripe for them to take the money. Small attacks are often easy to defend, but targeted attacks often yield greater benefits. “

Cryptocurrencies have come under intense regulatory scrutiny around the world, despite the desire of developers and market participants to mainstream such assets.

Two large thefts were the main reason for the surge in losses this year, according to CipherTrace.

One of the frauds involved a Ponzi scheme involving cryptocurrency wallets and exchange PlusToken, which cost users $2.9 billion. Another fraud involved QuadrigaCX, a Canadian cryptocurrency exchange, which lost $195 million.

“Even without these two biggest thefts and scams, we’re still seeing a lot of multimillion-dollar criminal activity,” Mr Jeavons said. Such criminal activity is growing relatively steady every year, and we don’t expect that to change overnight. “

He also said criminal activity of less than $5m often goes under the news, as exchanges and regulatory teams often focus on larger, life-and-death threats to businesses.

But CipherTrace also reported that thefts and frauds in the industry were worth just $15.5 million in the third quarter, the lowest in two years. Despite the decline in reported attacks by the industry, the scale of criminal crime is still growing, Mr. Jevins said.

CipherTrace has previously pointed out that the types of crime in the cryptocurrency sector have shifted from direct theft to investment exit scams and other insider fraud. It also shows that it is becoming increasingly difficult for criminals to attack exchanges.

“Today’s attackers are patient and willing to spend more time waiting for the benefits,” Jevins said. Not only have we seen an increasing number of $100 million thefts and scams, but participants in these activities are becoming more cautious, cashing in only a small amount of cash to ensure that the activity is not discovered. “

The report also shows that 65 per cent of the world’s top 120 cryptocurrency exchanges have weak customer authentication (KYC) processes. “Regulators are seeking to share KYC information globally, and there is no doubt that this will have an impact,” CipherTrace said.

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