- Cryptocurrency thefts and scams may reach $1B by the end of the year.
- Global regulators are tightening their approach towards the industry.
Cryptocurrency industry is still plagued by theft and fraud despite growing regulatory attention to security and money laundering issues, according to the latest report published by cryptocurrency intelligence firm CipherTrace.
In the first quarter of 2019, cybercriminals got away with $356 million, including QuadrigaCX exit scam that cost cryptocurrency users of nearly $195 million. If the trend persists, the losses incurred by the industry due to cyber thefts and scams will surpass $1 billion by the end-of-year.
“Cyber criminals also developed ingenious new techniques to drain millions more from user accounts and wallets. These thefts only represent the losses that are visible. CipherTrace estimates the true number of crypto asset losses was much higher,” the report says.
Notably, the calculations do not include the latest Bitfinex/Tether controversy, which is still an ongoing case that involves a loss of $850 million.
This worrisome trend forced the global regulators to rethink their approach towards cryptocurrency exchanges and an industry as a whole. Many regulators are considering complete bans on privacy coins as their anonymous features make them harder to trace and allow cybercriminals to get away with it.
“Banks also continue to face problems coping with the coming wave of regulations as they increasingly recognize that there are undetected cryptocurrency operations in their payment networks and customer accounts. Plus, courts in some countries have ruled banks must do business with licensed cryptocurrency companies.-,” the researches write.
However, this cloud has a silver lining. according to Dave Jevans, CipherTrace CEO:
“Although this report punctuates some of the negative occurrences within the crypto ecosystem, it is important to view these illuminations as markers for improvement. This is the wake-up call crypto needs. Cryptocurrency is maturing, and that means having a few growing pains. Once we identify problems, we can find solutions. Crypto currency projects must grow up before they can move forward.”
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