According to “Q1 2019 Cryptocurrency Anti-Money Laundering Report” published by CipherTrace, a blockchain analytics firm dedicated to making cryptocurrencies safe and reliable, 2019 has already suffered losses worth $1.2 billion owing to cryptocurrency scams.
The figures are alarming considering the fact that they make up for 71% of the losses incurred in the whole of 2018. Moreover, these estimations may just be the tip of the iceberg given the cryptic nature of digital currencies.
According to CipherTrace’s report, the two major cryptocurrency exchanges that fell prey to massive cyber-hacks in the first quarter of this year are QuadrigaCX and Bitfinex that lost $195 million and $850 million, respectively. Bitfinex, however, still maintains that the said amount has not been hacked and, in fact, being held by various governmental authorities. The exchange insists that it is still trying to retrieve that amount.
What is the Reason Behind the Surge in Crypto Crimes?
The reason behind this rampant atmosphere of fraud, according to CipherTrace, is the absence of clear and stringent laws in the sector, especially in terms of cross-border payments. However, the startup was quick to point out that:
“A tsunami of tough new global anti-money laundering (AML) and counter-terror financing (CTF) regulations will roll over the crypto landscape in the coming year.”
The report also noted the extreme lengths to which perpetrators of crypto fraud are willing to go to achieve their ends. From kidnapping to misleading information, criminals are trying every trick in their bag to beguile the general public, a recent example of which was seen in Singapore where two innocent men were trapped by hackers posing as government officials from China.
Although the timely action of the Singaporean police saved the two individuals, the incident did highlight the need for more effective laws to curb the money laundering menace.