Nearly $1 billion in cryptocurrency theft so far in 2018

CipherTrace Cryptocurrency AML report2

Nearly $1 billion in cryptocurrency theft so far in 2018

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Ciphertrace Cryptocurrency Anti-money Laundering ReportA new report from cybersecurity firm CipherTrace says cryptocurrency thefts have reached nearly $1 billion so far in 2018.

$927 million has been stolen by the end of September 2018, the company says, an increase of 250% over the entire previous year.


Unreported thefts total more than $60 million


Cryptocurrency Theft 2018CipherTrace estimates there was $60 million in further cryptocurrency thefts not reported in addition to those identified for its report. The report says as many as 50% more transactions may be unidentified.

“The regulators are still a couple of years behind because there are only a few countries that have really applied strong anti-money laundering laws,” Dave Jevans, CEO of CipherTrace, told Reuters in an interview.

97% of direct bitcoin payments from criminals went to exchanges in countries with weak anti-money laundering laws.

“This extensive 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,” commented Jevans, who also is co-chair of the Cryptocurrency Working Group at the “We will see the opportunities to launder cryptocurrencies greatly reduced in the coming 18 months as cryptocurrency AML regulations are rolled out globally.”


Cryptocurrency laundry is open for business


Criminal Bitcoin 2018, CipherTraceIt’s hardly surprising that regulators are concerned about cryptocurrency exchanges. The report estimates more than $2.5 billion in stolen bitcoins have been laundered through cryptocurrency exchanges since 2009.

Jevans said cryptocurrency exchanges have also been used to purchase 236,979 stolen bitcoins equal to more than $1.5 billion in value. ““All exchanges get these money-laundered funds. You really can’t stop them.”

The company looked at 20 suspect cryptocurrency exchanges, analyzing and crosschecking more than 350 million transactions before identifying 100 million transactions with counterparties.


Emerging threats


bitcoin market researchCipherTrace said the number of smaller thefts in the $20 million-$60 million range has grown and totaled $173 million in the third quarter of 2018 alone.

New cryptocurrency crime threats are also emerging, including highly targeted mass cyber extortion, SIM swapping, and advanced cyber attacks on exchange personnel.

“SIM swapping is becoming widespread. It involves transferring the victim’s phone number to a SIM card held by a hacker. Once SIM swapping attackers receive the compromised phone numbers, they use them to reset passwords and break into the victims’ accounts, including accounts on cryptocurrency exchanges. In one instance, a hacker used the technique to allegedly steal $24 million from a wealthy investor,” the report said.

Jevans said he expects stolen cryptocurrency to reach $1 billion by the end of the year, funds which will have to be laundered in order for criminals to benefit, and further illustrating the need for stronger regulations and anti-money laundering programs around the globe.

CipherTrace Cryptocurrency AML reportThe report says 79 countries have weak or nonexistent anti-money laundering programs to combat lax money laundering regulations, know-your-customer (KYC) enforcement, reporting of large transactions, reporting suspicious transactions and poor record-keeping and monitoring.

You can view or download a copy of the CipherTrace  Q3 Cryptocurrency Anti-Money Laundering Report here.