A new report from CipherTrace details the extent of criminal activity surrounding cryptocurrency, with $1.7 billion stolen and scammed in 2018, preceding many regulations on the digital currency going into effect in 2019. The “CipherTrace Q4 Anti-Money Laundering Report” highlights the various methods criminals used to steal cryptocurrency, occurring during a downturn in the prices and a slump in the market.
More than $950 million was stolen by hackers in 2018, and investors, as well as exchange users, lost another $725 million from fraudulent ICOs, phony exchange hacks, and Ponzi schemes. Many scammers took advantage of consumers by promoting their cryptocurrency only to walk away with the money, claiming they cannot return assets to customers, indicating a shift in cybercriminal techniques from hacking to manipulating users through inside jobs.
Many criminals are successful in their scams by obscuring the original source of their funds with new and innovative money mixers, unregulated crypto-to-exchanges, and privacy coins. Cryptocurrency crimes were much higher in 2018 than 2017, with some losses over 3 times stronger, pointing to the sophistication of online criminals.
The report also identifies the Top 10 Trending Crypto Threats, including SIM swapping, email extortion and bomb threats, and sanction evasion. Decentralized stable coins, crypto dusting, and shadow money service businesses also pose major threats to users of bitcoin. By 2020, most countries, such as the US and EU, as well as the Group of 20, plan to enact strict cryptocurrency AML and Know Your Customer regulations to fight the cryptocurrency money laundering services.
“Cryptocurrency criminal activity continues to evolve and accelerate. Fortunately, pending global legislation will hamstring many criminals, global gangs, and terrorist groups by greatly reducing their opportunities to launder,” commented Dave Jevans, CEO of CipherTrace and co-chair of the Cryptocurrency Working Group at the APWG.org. “These tough new laws will drive bad actors to not only innovate but also flock to jurisdictions with weak regulatory oversight, as we have shown in earlier research.”
