Cryptocurrency Theft Triples Year over Year, Easier than Robbing Banks

Cryptocurrencies have opened up many new avenues for cyber criminals to explore. Crypto-related malware is on the rise, and crypto-jacking has become the most dominant cyber-crime on the scene. According to CipherTrace – a Menlo Park, California-based blockchain security firm that focuses on tracing cryptocurrency transactions for government entities and companies such as exchanges – crypto theft is at an all-time high, having nearly tripled in the first half of 2018 over all of last year.

CipherTrace says that thus far in 2018, $760 million in crypto has been stolen from exchanges such as Bitgrail, Coincheck, and countless others. Each day, news turns up of a new way crypto exchanges are being hacked.

Because there are more than 1,600 cryptocurrencies on the market, with more popping up each day through the explosion of ICOs – which are also up year-over-year from 2017 – it makes tracing each coin extremely difficult, and therefore even more tempting for cyber criminals. 

CipherTrace Chief Executive Officer David Jevans told Bloomberg “it’s a lot easier than robbing banks.” He added:

“There are so many cryptocurrencies now, and they are worth so much money, and there are so many exchanges globally where you can cash out, that we’ve seen not just traditional cyber gangs but we’ve seen a new set of criminals enter this space. This overall market expansion has created a whole new generation of cyber criminals that didn’t exist 15 months ago.”

Jevans believes that many coins are going to be “kicked off exchanges because it’s going to be difficult to track transactions.” This has already begun to happen in Japan with the Financial Services Agency forcing exchanges to delist privacy coins such as Monero and Zcash. The US Secret Service has also called on Congress to take action against similar coins. Privacy coins are often used by cyber criminals to hide their tracks. 

As regulators such as the US Securities and Exchange Commission, who deem most cryptocurrencies to be securities, begin to tighten up policies around cryptocurrencies, many smaller coins will likely be delisted. Regulators are also working hard to push stricter anti-money laundering and know-your-customer standards at exchanges to better prevent money laundering, which Jevans says has also grown as a result of all the crypto theft.