Crypto exchange theft jumps in first half of 2018

July 04, 2018
Chris Wheal

Cryptocurrency theft rose threefold in the first half of 2018 compared with the whole of 2017 according to a report published on Tuesday by CipherTrace.

CipherTrace reports massive surge in cryptocurrency exchange theft in 2018: CipherTrace

In its quarterly Cryptocurrency Anti-Money Laundering Report, the cyber security firm said that three times more digital currencies were stolen from exchanges in the first six months of this year than in all of last year.

CipherTrace reported that a total of $761m was stolen from cryptocurrency exchanges in the first half of this year, compared with $266m during all of 2017.

 

Courtesy of CipherTrace 2018 Q2 Anti-Money Laundering Report

The company estimated that the total losses for this could rise to around $1.5bn.

Phenomenal growth

“The phenomenal growth in the value of cryptocurrencies like Bitcoin over recent years has attracted investors, speculators, and thieves,” the report said.

“In the last two years alone, some of the best and brightest criminal minds made off with $1.21 billion in cryptocurrency from exchanges.”

In addition, CipherTrace reported that the US Federal Bureau of Investigation (FBI) received an almost sixfold increase in the value of virtual currency complaints from 2015 to 2017.

Anonymity attracts

Criminals are early adopters of new technologies, the report said, so it was no surprise that bitcoin and other virtual currencies have attracted cybercriminals due to several unique qualities.

“Crypto transactions do not require criminals to use their real names, bank account numbers, etc, which can enable them to evade the watchful eye of law enforcement and other investigators.

Transferring crypto funds does not require banks for other financial intermediaries — such as PayPal. Moreover, unlike robbing a bank, thieves can raid cryptocurrency exchanges with little fear of being caught.”

The report added that the growth in cyber criminal activity in the cryptocurrency sector will encourage stricter regulation, concluding that demand would also grow for technology that can “de-anonymise” blockchain transactions so investigators can uncover cyber theft and money-laundering activities.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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