CipherTrace: Crypto Crime Losses up to $4.4 Billion
- Two huge crypto crimes accumulated more than $3 billion in losses for users.
- Attempts of fraud constitute the bigger percentage of crypto-related crimes, leaving the pure acts of thefts second.
Man with suitcase full of money. Freepik
Cryptocurrency criminal activity has climbed up this year in comparison with 2018 according to a report by CipherTrace.
As per the blockchain forensics firm’s report, digital currency crime losses rose to a stunning $4.4 billion for the first nine months of 2019. This is more than 150% up from the previous year’s tally of $1.7 billion.
CipherTrace chief executive officer, Dave Jevans noted that “the 150% increase in crypto theft and fraud reflects how criminals are adapting for bigger and better scores”.
Jevans analyzed:
“Criminals chase money and the money is right here and ripe for the taking. Little attacks are often easy to defend against, but targeted attacks are far more lucrative.”
Cryptocurrency developers and the people involved in the industry as a whole are trying to enter the mainstream but are suffering massive regulatory inspections.
As CipherTrace’s data shows, the main drivers behind the huge increase in criminal cases were two big crypto thefts.
As part of the largest theft of the year so far, users lost $2.9 billion, falling into the trap of a well-known Ponzi scheme.
Clients of Canadian crypto exchange QuadrigaCX suffered the second biggest crypto robbery with more than $195 million lost right after the mysterious death of co-founder and CEO, Gerald Cotten.
Jevans noted that “even without the two biggest thefts and scams, we are still witnessing many multi-million dollar crimes.”
According to him many times crimes under $5 million are not reported in such detail as police focus their attention on larger-scale cases:
“There is a relatively consistent increase in criminal activity year over year and we don’t expect that to change overnight,” Jevans added.
Jevans thinks that even if we see less reported fraud cases, criminals are still getting away with “bigger wheelbarrows of cash.”
CipherTrace recorded $15.5 million in quarterly thefts and fraudulent activity in the third quarter, which is the lowest in two years.
Previous data from CipherTrace showed that the majority of crypto crimes have moved from classic thefts to fraudulent activities executed by inside people.
Jevans profiled the modern crypto criminal:
“Today’s attackers are patient and willing to spend more time waiting for a payout.”
He added:
“Not only have we seen more and more $100 million thefts and scams, those responsible are acting carefully, only cashing out small amounts to stay under the radar.”
As the report showed, 65% of the top 120 global crypto exchanges have feeble know-your-customer (KYC) requirements.
According to CipherTrace this will surely have implications as regulators focus more and more on transparency in KYC processes.
- The New York Jurors took 4 fours of deliberating before pronouncing the former FTX CEO guilty of all seven charges of fraud and conspiracy to commit fraud.
- Bankman-Fried will now have to appear in court on 28 March, 2024, where he will face a potential maximum sentence of 115 years in prison.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
lev radin/Shutterstock
- The U.S. Department of Justice has expressed its concerns over Sam Bankman-Fried’s seven expert witnesses, and requested they be barred from testifying on the case.
- The DoJ claimed most of the proposed experts lacked the necessary foundation for their opinions, making them unqualified to be an expert witness.
- Do Kwon was charged with conspiracy to defraud, commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation.
- A spokesperson for the Manhattan U.S. attorney’s office, which brought the charges against Do Kwon, said the Department of Justice (DoJ) will seek his extradition.