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Cryptocurrency crime losses more than double to US$4.5bil in 2019, report finds

NEW YORK: Losses from cryptocurrency crime surged to US$4.52bil (RM18.7bil) final yr, as insider theft soared whilst hacking losses declined, in line with a report from blockchain forensics firm CipherTrace.

Final yr’s losses had been up practically 160% from 2018’s complete of US$1.74bil (RM7.2bil).

Blockchain, which first emerged because the system powering bitcoin, is a shared database maintained by a community of computer systems.

Cryptocurrency person and investor losses attributable to fraud and misappropriation in 2019 elevated by greater than 5 occasions, whereas hacks and thefts fell by 66%, the report confirmed.

“We seen a big uptick in malicious insiders scamming unsuspecting victims or leaching on their customers by way of Ponzi schemes,” Dave Jevans, CipherTrace chief govt officer, stated. “Assaults from the within of organisations result in important exits with main consequence to the crypto-ecosystem.”

Since bitcoin’s launch greater than 10 years in the past, governments and regulators all over the world have grappled with the opaqueness and lack of transparency within the cryptocurrency market that has led to large losses for traders.

Two massive losses early final yr had been the primary drivers for the surge, CipherTrace stated.

Customers and clients misplaced roughly US$3bil (RM12.4bil) from an alleged Ponzi scheme involving crypto pockets and alternate PlusToken.

The opposite important loss was the just about US$135mil (RM558.5mil) that clients misplaced from Canadian crypto alternate QuadrigaCX following the surprising dying of its co-founder, in line with CipherTrace.

The CipherTrace report additionally discovered illicit cryptocurrency cash service companies – together with crypto exchanges – have transmitted funds on the fee networks of virtually all the highest 10 US retail banks.

Evaluation additional revealed {that a} typical massive US financial institution processes billions of {dollars} yearly in undetected cryptocurrency-related transfers.

“These clandestine operations create AML (anti-money laundering) compliance dangers as a result of criminals should discover methods to launder ill-gotten crypto earnings,” CipherTrace stated within the report.

CipherTrace analysis discovered that banks globally paid greater than US$6.2bil (RM25.65bil) in AML fines in 2019. – Reuters

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