CipherTrace: $4.4 billion of crypto-related fraud in 2019
As CipherTrace say in their report, the total amount of fraud and theft, related this way or that to cryptocurrencies, is worth $4.4 billion in 2019. He company made a profound analysis of the most common claims of the major exchange platforms. These steps gave an opportunity for the security research firm to investigate the most common fraud patterns in crypto-related areas.
CipherTrace reports: less crimes and weaker KYC standards
In the report they say that the amount of crimes related to the cryptocurrencies declined in total being compared to the data of previous quarters, thus the KYC standards turned out to be the weakest possible in the last two years. Thus they say that the criminals stole $6.5 million using the gaps in the crypto exchange platforms’ security. Additional $9 million were stolen with exit scams and Ponzi schemes, the report says. The final amount worth of $15.5 million is the smallest mark in the last couple of quarters, so we can say that the total amount really became lower. Does it mean that the crypto exchanges became more secure? Not quite so.
The stolen amounts sky-rocketed. Who to blame?
At the same time, the amount of the money stolen this year is significantly bigger than the previous one. In some media they even use the term “sky-rocketed”. In the 2018th the estimated amount to be stolen this way or that is about $1.7 billion. This year it reaches $4.4 billion, CipherTrace says. They add that it happened because thieves are hunting for the bigger amounts. So they make unexpected moves while processing the scheme.
The vast majority of losses was triggered by two main schemes. They are so called the PlusToken and QuadrigaCX crypto exchange fiasco. They both resulted in almost $3 billion loss.
In interesting fact – as far 120 crypto exchanges were put to analysis, it turned out that 1\3, or 35%, had good KYC standards. The weakest standards were located in 24% of cases. So the standards are tone the thing to blame.