• Tue, 10 Dec 2019, 02:32 AM
  • All times are UTC
  • Edition:
    International
Copy link
Increase text size
Decrease text size
Link copied

CipherTrace estimates crypto industry lost $4.3B to cyber criminals in 2019, identifies "exit scam" as concerning trend

Tue, 13 Aug 2019, 05:33 am UTC

Cryptocurrency intelligence firm CipherTrace has estimated that cryptocurrency-related thefts, scams and fraud could exceed $4.3 billion for the year.

The firm has released its Q2 2019 Cryptocurrency Anti-Money Laundering (AML) Report. The quarterly report analyzes cryptocurrency-related crime and provides a comprehensive overview of active and pending regulatory legislation and emerging trends. It also covers Facebook’s Libra and its potential implications for global finance.

“Outright thefts as well as scams and other misappropriation of funds from cryptocurrency users and exchanges continued apace, netting criminals and fraudsters approximately $4.3 billion in aggregate for 2019,” the report states.

CipherTrace said that despite the efforts of crypto exchanges, wallets and other custody services to ramp up their security measures, cybercriminals looted $125 million in bitcoin, ethereum and other digital assets from exchanges this quarter. It particularly noted the security breach at Binance in which the exchange lost tens of millions of crypto assets to hackers who used “a lethal cocktail of phishing, viruses and other attack vectors.”

That said, CipherTrace clarified that the amount of $125 million is based on the price of the assets at the time they were stolen. In actuality, given the recent price movement of Bitcoin and other tokens, this value is likely much greater since they tripled in value during Q2 2019.

In addition, exit scams, thefts and dark market takedowns still under investigation could push the total losses much higher, it said.

The Growing Trend of Exit Scams

The report has identified a concerning trend that could overshadow the cryptocurrency losses due to cyberattacks—the “Exit Scam.”

While hacks have netted criminals $227 million during the first half of 2019, several alleged exit scams under investigation have netted fraudsters $3.1 billion dollars and $874million has been misappropriated.

On this front, the report cited the unraveling of certain facts in the “Fifth Report of the Monitor” related to the infamous QuadrigaCX incident, which ultimately cost exchange users nearly $200 million in lost crypto assets. It also noted the unconfirmed exit scam around PlusToken, a purportedly South Korean exchange and investment pyramid scheme, which may have cost millions of unsuspecting crypto investors as much as $2.9 billion in lost funds.

“CipherTrace has not completely confirmed the details of this alleged exit scam [PlusToken], including in whose pockets the billions ultimately found a home,” CipherTrace said.

Meanwhile, the darknet marketplace Wall Street Market’s attempted exit scam resulted in the seizure of over $11 million worth of crypto assets by European authorities. Wall Street Market was one of three darknet markets seized this quarter.

Also, the report pointed out that despite the proliferation of privacy coins, Bitcoin is still king in dark markets and cybercrime.

Regulatory Measures

CipherTrace said that bad actors would now have a hard time to launder their illicit funds as new Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations passed in 2018 are coming into effect globally over the coming months. In addition, the Financial Action Task Force (FATF) advised member nations to begin implementing its “Travel Rule,” which applies to all cryptocurrency transactions over a $1,000 threshold.

The G20 has already announced its full support to the new rule, which requires transactions between exchanges to include personal information about the sender and the receiver of funds similar to international bank wire and SWIFT transfers of fiat funds.

“Cryptocurrency regulation is now obviously viewed as an imperative across the globe, and there is increasing political concern about the potential financial disruption blockchain technologies pose,” CipherTrace said. “In particular, Facebook’s entre into the cryptocurrency world by announcing Libra ignited a fury of debate in global capitals regarding the risks and rewards of these new financial tools.”

TokenPost | [email protected]

<Copyright © TokenPost. All Rights Reserved. >

To leave a comment, please sign in.
More
  • Bitcoin (BTC) $7,407.01 (-1.57%)
  • Ethereum (ETH) $147.69 (-1.92%)
  • XRP (XRP) $0.224600 (+0.84%)
  • Bitcoin Cash (BCH) $209.33 (-2.08%)
  • Litecoin (LTC) $44.81 (-1.87%)
  • Bitcoin (BTC) $7,407.01 (-1.57%)
Dec 9, 2019 (Monday)
16:11
Blockchain-based social media platform Voice to release public beta in February 2020
14:49
Crypto exchange OKEx to launch options trading this month
13:19
Cryptocurrencies could replace fiat currencies by 2030, says Deutsche Bank
12:52
Crypto Technicals: Major Cryptocurrency Support Resistance Levels
12:52
Crypto Technicals: Major Cryptocurrency Daily Technical Outlook
12:31
Crypto Technicals: XRP/USD halts 4 straight session's of gains, finds stiff resistance at 21-EMA
10:34
Boerse Stuttgart’s cryptocurrency exchange BSDEX opens to all German investors
09:19
Ukraine passes final regulatory law for anti-money laundering; Taps Belarus exchange for more regulatory expertise
08:31
Crypto Technicals: LTC/USD lacks upside momentum, sideways grind likely before next leg lower
08:29
Crypto Technicals: ETH/USD holds above 5-DMA, 'Golden Cross' on hourly charts keeps scope for upside
05:29
Crypto Technicals: BTC/USD shows bullish signs on intraday charts, break above 21-EMA will open upside
04:39
Microsoft unveils blockchain token and data management service
04:03
Securitize acquires Japanese blockchain consultancy firm following backing from SBI Investment
03:21
Kadena blockchain to track CBD oil in partnership healthcare-focused tech firm
03:13
Bank of China lends $2.8B to SMEs using own blockchain-based bond issuance system
Dec 8, 2019 (Sunday)
10:32
Investment group acquires green light from the SEC for Bitcoin Futures fund
10:16
SEC taps British court to acquire deposition from former Telegram chief investment advisor
Dec 6, 2019 (Friday)
13:25
Crypto Technicals: Major Cryptocurrency Support Resistance Levels
13:24
Crypto Technicals: Major Cryptocurrency Daily Technical Outlook
11:19
Crypto Technicals: LTC/USD extends sideways, finds strong support at 42.45 (Trendline)
Subscribe to the TokenPost newsletter!
Don't show me this again today.
Back to top
Copyright ⓒ TokenPost. All Rights Reserved.
PUBLISHsoft