Theft of cryptocurrencies through hacking of exchanges and trading platforms soared to $927 million in the first nine months of the year, up nearly 250% from the level seen in 2017, according to a report from US-based cyber security firm Cipher-Trace released on Wednesday.
The report, which looks at criminal activity and
money laundering in the digital currency market, also showed a steadily growing number of smaller thefts in the $20-60 million range, totaling $173 million in the third quarter.
Digital currencies stolen from exchanges in 2017 totalled just $266 million, according to a previous report from
CipherTrace.
"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, chief executive officer of CipherTrace, said. Jevans is also the chairman of the Anti-Phishing Working Group, a global organisation that aims to help solve cyber crime. He said there are likely 50% more criminal transactions than those that were traced for this report. For instance, CipherTrace is aware of more than $60 million in
cryptocurrency that was stolen but not reported.
The data also showed that the world's top cryptocurrency exchanges from countries with weak anti-money laundering regulations (AML) have been used to launder $2.5 billion worth of bitcoins since 2009. The top 20 virtual currency exchanges in terms of volume were analysed for the report. The CipherTrace report declined to name those exchanges. These money-laundered funds represent transactions that Cipher-Trace was able to directly monitor and designate as criminal or highly suspect.
In estimating the $2.5 billion, CipherTrace looked at about 350 million transactions from the 20 exchanges and found 100 million of those with counterparties. From there, the firm was able to cross-check the 100 million transactions with its own data on criminal activity.