Friday, Apr 19, 2024 | Last Update : 11:46 AM IST
Cryptocurrency thefts, fraud hit USD 1.2 billion in first quarter
The value of losses from crime in the digital currency sector in 2018 hit USD 1.7 billion.
Losses from the theft of cryptocurrencies from exchanges and fraud-related activities surged in the first quarter of the year to USD 1.2 billion, or 70 per cent of the level for all of 2018, cybersecurity firm CipherTrace said on Tuesday.
The value of losses from crime in the digital currency sector in 2018 hit USD 1.7 billion. But cryptocurrency crime has ballooned as the market has slowed down, prices have plunged and business activity has stalled.
In the first quarter of 2019, theft of digital currencies from exchanges and scams totalled USD 356 million, while losses from fraud or misappropriated funds amounted to USD 851 million, the respected US-based CipherTrace said in a quarterly report.
CipherTrace said it included losses at Canadian digital platform QuadrigaX, where roughly CUSD 180 million (USUSD 134 million) in cryptocurrencies have been frozen in user accounts after the founder, the only person with the password to gain access, died suddenly in December.
“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,” CipherTrace chief executive officer Dave Jevans told Reuters.
“I would also add that insider issues such as fraud or theft have grown mostly due to operations outside of the US 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.”
Jevans is also the chairman of the Anti-Phishing Working Group, a global organisation that aims to help solve cyber crimes.
The CipherTrace report also said there was a major gap in the current cryptocurrency regulatory environment with respect to cross-border payments from US exchanges to offshore exchanges, which are beyond the purview of US authorities.
An analysis of 164 million bitcoin transactions showed that cross-border payments to offshore exchanges have grown 46% over the last two years, contributing to the USD 8.7 trillion, or 11.5 per cent of the world’s wealth, hidden offshore, the report said.
