Report: Crypto-related Thefts and Scams Hit $1.2 billion in the First Quarter of 2019




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Crypto thefts 2019

Yesterday, Ciphertrace, a blockchain security firm, revealed that crypto-related thefts and frauds reached $1.2 billion in Q1 2019. This figure represents 70 percent of all crypto thefts and scams last year. Last year’s the crypto space lost $1.7 billion to thefts and fraud.

The report “Q1 2019 Cryptocurrency Anti-Money Laundering Report” notes that attackers stole over $356 million from exchanges and infrastructure. Exit scams saw the crypto space lose $195 million. Ciphertrace believes Quadrigacx was the largest exit scam during Q1. The exchange led to the loss of more than $145 million worth of crypto. Other fraud cases and thefts accounted for the remaining $649 million.

Crypto Crimes on the Rise

Dave Jevans, the CEO of Ciphertrace said,

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.

He went on to state that,

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.

Attacks on Crypto Exchanges Become More Prevalent

Just four months into the year, there have been several hacks on leading crypto exchanges in different parts of the world. The first attack was on New Zealand-based Cryptopia. The exchange did not issue an official statement detailing how much it lost. However, a report claims the hack saw Cryptopia lose $16 million worth of ETH and ERC-20 tokens.

In March, Bithumb, the leading crypto exchange in South Korea unveiled that it had been hacked for the third time. The hack saw the exchange suffer a $19 million loss. Bithumb claimed that all the stolen funds belonged to it and that the hackers had not touched its customers’ funds.

Dragonex, a Singapore-based crypto exchange also suffered a hack in March. The exchange did not unveil how much it lost. Days after the attack, Dragonex announced that it had retrieved some of the stolen funds. The exchange added that it was tracking the stolen tokens using its in-house Crypto Analysis Transaction Virtualization (CATV) tool.

Cross-border Transactions to Offshore Exchanges Increase

According to Ciphertrace, the current crypto regulatory environment has a big gap. This gap is bigger when it comes to cross-border from US-based exchanges to off-shore exchanges, which are not controlled by US law. The firm recently found that cross-border transactions to off-shore exchanges had increased to 66 percent in the first quarter of this year.

Do you think crypto regulations can help reduce crimes in the nascent industry? Let us know in the comments below.