Losses from crypto crimes surge by 160% in 2019 compared to 2018

• Reportedly, investor losses due to fraud and misappropriation surged by over five times, while hacks and thefts fell by 66%.
• Users lost $3 billion in the PlusToken Ponzi scheme alone.

According to a new report by forensics company CipherTrace, losses incurred from crypto crimes increased to $4.52 billion last year. In comparison to 2018’s losses of $1.74 billion, last year’s numbers have gone up by nearly 160%. The report indicated that in 2019, investor losses due to fraud and misappropriation surged by over five times, while hacks and thefts fell by 66%.

Dave Jevans, CipherTrace chief executive officer, told Reuters:

We noticed a significant uptick in malicious insiders scamming unsuspecting victims or leaching on their users through Ponzi schemes. Attacks from the inside of organizations lead to significant exits with major consequence to the crypto-ecosystem.

Ever Since the launch of Bitcoin over a decade ago, regulators and governments have voiced their concerns regarding the lack of transparency in the cryptocurrency market, which has led to massive losses for investors.

In an alleged Ponzi scheme involving crypto wallet and exchange PlusToken, users have lost about $3 billion. Another significant loss was the almost $135 million that customers lost from Canadian crypto exchange QuadrigaCX. The report also noted illicit crypto money service platforms had transmitted funds on the payment networks of almost all the top 10 US retail banks.

It was further indicated by the report that a typical major US bank processes billions of dollars annually in undetected cryptocurrency-related transfers. Banks across the world paid more than $6.2 billion in AML fines in 2019, as per CipherTrace research results.

These clandestine operations create AML (anti-money laundering) compliance risks because criminals must find ways to launder ill-gotten crypto profits.

 

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