Crypto Theft Hits Nearly $1B USD In First Three Quarters Of 2018 – Report

Crime, News | October 12, 2018 By:

Cryptocurrency theft through hacking of exchanges soared to $927 million in the first nine months of 2018, according to a report by crypto intelligence firm CipherTrace.

The report, titled “Cryptocurrency Anti-Money Laundering 2018 Q3,” revealed that theft of cryptocurrencies at exchange and platform layers continued to represent a major problem in the third quarter of the year. The report said that the losses are almost 250 percent larger than in 2017, which only amounted to $266 million.

“These cyberattacks bring the total amount of cryptocurrencies reported as stolen in 2018 through the end of Q3 to $927 million,” the report said. “CipherTrace estimates this trend will bring the total stolen and reported in 2018 to well over $1 billion by the end of the year.”

The most notable were the $530 million worth of tokens stolen in Japan from Coincheck and $195 million worth of tokens stolen from BitGrail. Several heists in the $20 million-$60 million range are also steadily rising, totaling $166 million in the third quarter. These include Bithumb (over $30 USD), Bancor ($23.5M USD), Geth (over $20M USD), Coinrail (over $40M USD), and Zaif (about $60M USD).

“This data indicates a pattern of smaller robberies on a regular basis and sophisticated professional cyber thieves who carry out hacks at both the exchange and platform levels by capitalizing on exposed vulnerabilities, as well as by socially engineering employees who work at these companies,” the report said.

The report also revealed that 97 percent of direct bitcoin payments from identifiable criminal sources were received by unregulated cryptocurrency exchanges. Through quantitative analysis of all the transactions on the top 20 cryptocurrency exchanges globally, CipherTrace identified 380,155 bitcoins ($2.5B USD at today’s prices) that were received by crypto exchanges directly from criminal sources between January 9, 2009 and September 20, 2018.

“These results indicate that money laundering activity using cryptocurrencies is directly correlated to AML regulations and their enforcement on exchanges,” the report said. “They also show that cryptocurrency exchanges in countries with weak AML regulation receive nearly 5 percent of their payments directly from criminal sources.”

Dave Jevans, CEO, CipherTrace and co-chair of the Cryptocurrency Working Group at the APWG.org, said that the research shows that regulation does have a direct correlation in hindering criminal activity, and we are on the right track to instill further trust in the crypto ecosystem.

“Different geographies are competing on regulations and trying to become ‘trusted’ digital currency hubs in order to grow their economies,” said Jevans. “We will see the opportunities to launder cryptocurrencies greatly reduced in the coming 18 months as cryptocurrency AML regulations are rolled out globally.”