CipherTrace: crypto theft hit £1.3bn in 2018

Cryptocurrencies stolen from exchanges and scammed from investors surged more than 400% in 2018 to around $1.7bn (£1.3bn), according to a report from US-based cybersecurity firm CipherTrace.

The report looks at cyber-criminal activity in the digital currency market.

Of the $1.7bn (£1.3bn), nearly $950m (£726m) alone came from cryptocurrency exchange-related thefts, up 3.6 times higher than in 2017, CipherTrace said.

Most of these thefts affected users in Korea and Japan, at 58%. In addition to those thefts, another $725m (£554m) was lost through exits scams such as fraudulent initial coin offerings, phone exchange hacks, and Ponzi schemes.

In 2017, exit scams amounted to only $56m (£42m).

“New breed of cybercriminals”

“This finding indicates that a new breed of cybercriminals are shifting their techniques from hacking to insider jobs,” CipherTrace stated.

“These numbers only represent the loot from crypto crimes that CipherTrace can validate; we have little doubt that the true number of crypto asset losses is much larger,” the cybersecurity firm said in the report.

In the first three quarters, thefts by hackers dominated the crypto crime scene, whereas the fourth quarter was mainly about inside jobs or frauds, the report said.

According to the report, the rise in the dollar value of cryptocurrency led to a hostile environment for exchanges and the rise of more sophisticated online criminals.

Value drop

Cryptocurrency values dropped last year, with a market capitalisation of more than 1,600 currencies amounting to a total of $112bn (£85.6bn) in January 2019, down more than 80% from last year, according to a Reuters report.

CipherTrace said that some of the most developed territories in the world, in terms of their economic status, are planning to introduce strict regulations to govern cryptocurrencies by the end of 2019.

“Cryptocurrency criminal activity continues to evolve and accelerate,” said CipherTrace chief executive, Dave Jevans, in a statement. “Fortunately, pending global legislation will hamstring many criminals, global gangs, and terrorist groups by greatly reducing their opportunities to launder.

“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.”

The company also identified a number of trending crypto threats and provided actionable threats for anyone dealing with cryptocurrency.

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