CipherTrace AML Report: 2018 saw 3.6x more stolen from crypto exchanges than in 2017

CipherTrace AML Report: 2018 saw 3.6x more stolen from crypto exchanges than in 2017

2018 Cryptocurrency Market Analysis on Thefts and Scams world-wide

2018 saw 3.6x more stolen from cryptocurrency exchanges than in 2017, totalling at least $950 million in worth (fluctuating with market value) and another $725 million lost in scams. Despite it being a down year in that market, there was a whopping $1.7 billion total stolen or scammed across the board.

This dramatic rise was detailed in the CipherTrace 2018 Q4 Cryptocurrency Anti-Money Laundering (AML) Report released earlier today.

The extreme jump in lost crypto is made even more apparent by the fact that tokens were each worth so much less all of 2017 than 2018, highlighting just how many were actually taken. These increasingly high security threats in the online cryptocurrency market has resulted in a slew of new regulations internationally that will be beginning some time in 2019 which means the perpetrators will have to cash out beforehand or risk losing it all.

Dave Jevans, CEO of CipherTrace and co-chair of the Cryptocurrency Working Group at had this to say about the published research:

“Cryptocurrency criminal activity continues to evolve and accelerate. Fortunately, pending global legislation will hamstring many criminals, global gangs, and terrorist groups by greatly reducing their opportunities to launder.”

The publication listed these as the Top Ten Crypto Threats at the beginning of the report:

SIM swapping: An identity theft technique that takes over a victim's mobile device to steal credentials and break into wallets or exchange accounts to steal cryptocurrency.

Crypto dusting: A new form of blockchain spam that erodes the recipient's reputation by sending cryptocurrency from known money mixers.

Sanction evasion: Nation states that use cryptocurrencies to circumvent sanctions and that has been promoted by the Iranian and Venezuelan governments.

Next-generation crypto mixers: Money laundering services that promise to exchange tainted tokens for freshly mined crypto, but, in reality, cleanse cryptocurrency through exchanges.

Shadow money service businesses (MSBs): Unlicensed MSBs that bank cryptocurrency without the knowledge of host financial institutions, thus exposing banks to unknown risk.

Datacenter-scale cryptojacking: Takeover attacks that mine for cryptocurrency at a massive scale and that have been discovered in datacenters, including AWS.

Lightning Network transactions: Enabling anonymous bitcoin transactions by going “off-chain” and now scaling to $2,150,000.

Decentralized stable coins: Stabilized tokens that can be designed for use as hard-to-trace private coins.

Email extortion and bomb threats: Mass-customized phishing email campaigns by cyber-extortionists using old passwords and spouse names and that demand bitcoin. Bomb threat extortion scams spiked in December.

Crypto robbing ransomware: New malware distributed by cyber-extortionists that empties cryptocurrency wallets and steals private keys while holding user data hostage.

According to CipherTrace, there will be strict AML and Know Your Customer (KYC) regulations by 2020 in a majority of modern economies but as protections become more expansive, money laundering schemes will look for new and inventive ways to get around by obscuring and mixing funds, unregulated exchanges, and privacy coins.

This report has been the most comprehensive, in-depth market analysis of cryptocurrency crime and AML regulations by jurisdiction. It outlines its global impact and introduces enthusiasts and investors to coming enforcement and emerging laundering schemes. For more information, read or download the whole report here: