Stolen Cryptocurrencies “Three Times Bigger” This Year than Last Year: Report
Theft of cryptocurrency exchanges surged in the first half of 2018 to three times the level seen for all of 2017, according to a new report from CipherTrace, a U.S.-based cyber security company.
Crypto Theft on the Rise
The report, which was released Thursday, showed that a total of $761 million was stolen from cryptocurrency exchanges in the first half of 2018, compared with about $266 million for all of last year. CipherTrace estimates that losses could rise to $1.5 billion this year as hackers set their sights on vulnerable exchanges.
In an interview with Reuters, CipherTrace chief executive Dave Jevans said stolen cryptocurrencies are being used to launder money to aid criminals in hiding their true identities. This has resulted in a three-fold spike in money laundering of digital currencies.
CipherTrace isn’t the only organization to estimate the size of crypto theft. Last month, cyber security company Carbon Black released a report showing $1.1 billion worth of digital currency was stolen through the first half of the year. The report’s authors remarked on “just how easy to is without any tech skill to commit cybercrimes like ransomware.”
Carbon Black’s security strategist Rick McElroy compared the theft of digital currency exchanges with criminal exploitation of the gold rush more than 150 years ago.
“As was the case during the physical gold rush in the mid-1800s, there are criminals looking to exploit innocent parties of their earnings,” he said. “Carbon Black has found that modern-day cybercriminals are increasingly using the dark web to facilitate cryptocurrency theft on a large scale.”
South Korean exchanges have been the center of multiple hacks in recent months, the most recent being a $32 million heist of Bithumb. In response, South Korean lawmakers have expedited new regulations aimed at boosting anti-money laundering and know-your-customer requirements. The new regulatory framework has also prompted an investigation of three major financial institutions, which are known to provide bank accounts to exchanges and their users.
CipherTrace said exchanges are in constant dialogue with global law enforcement agencies about beefing up security requirements to prevent criminals from exploiting their networks.
“Now we are seeing the big guys coming together asking for cryptocurrency anti-money laundering regulation – it is inevitable, it will be unified, and it will be global,” Jevans said.
U.S. law enforcement agencies are actively monitoring criminal activity in the cryptocurrency sector. The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has been especially active, having referred to research showing that $1.5 billion was stolen from cryptocurrency exchanges over a two-year period.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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