Cryptocurrency Anti-Money Laundering report published recently indicates that around $1 Billion worth of digital assets were stolen in 2018. The analysis was published by Q3 Cipher Trace Cryptocurrency Intelligence firm. The report is a quantitative analysis of all the transactions on the 20 top cryptocurrency exchanges globally.
The cyber security firm noted that there was an increase in the amount embezzled in the first quarter of the year alone which is more than the entire year of 2017. An estimated $927 Million was stolen as of three quarters of 2018, which as per Cipher Trace will easily touch $1 Billion by the end of December. CCN had earlier reported that around $731 Million worth of cryptocurrencies were stolen from crypto exchanges in the first half of 2018. CCN summarized that Japanese exchange Coincheck reported a theft worth $530 Million and Bitgrail based in Italy had lost token worth $195 Million according to the report.
Other major hacks this year were identified as Bithumb which reported a loss of $30 Million due to cyber intrusion. Hackers stole $23.5 Million from Bancor, and as a result, they were forced to shut down operations. Also, Coil Rail found itself exhausted of $40 Million in altcoins. Bitcoin Gold was duped of $18 Million worth of digital assets. Japan-based cryptocurrency exchange Zaif lost an estimated $60 Million. The report also figures that US is the most vulnerable country with 56% of all attacks focused on the US.
It has been revealed that unregulated Bitcoin Exchanges are a haven for these criminals and they are flowing large amounts of dirty Bitcoin through these exchanges turning them into clean cryptocurrency. Around 97% of Bitcoins are flushed through unregulated exchanges. The report has also shown that such transactions are reduced to a great extent when faced with tough AML regulations. Criminal Bitcoin received by exchanges with a low level of regulations is apparently 36 times more. Money laundered via such mediums comes to around a whopping $2.5 Billion.
Cipher Trace maintains that this might only be half the story and the amount stolen might be considerably higher as criminals are very clever in hiding their tracks.
The report also illustrates the rise of online mass customized extortion (spear phishing) using cryptocurrency as payment for ransom or blackmail as a significant threat. It also specifies other emerging threats such as advanced malware targeting crypto exchange personnel and SIM swapping and cyber-attacks on exchange personnel.
The report concludes with the importance of AML regulation which as per the experts would reduce the opportunities to launder cryptocurrencies throughout 2019 and 2020 if successfully enacted and enforced globally.