What’s Going On?
Cryptocurrency thefts approached $1 billion in 2018, an increase of almost 250 percent compared to the previous year.
Why Does It Matter?
Nearly five percent of all bitcoin sent to poorly regulated exchanges comes from criminal activity, according to the CipherTrace 2018 Q3 Cryptocurrency Anti-Money Laundering Report. Thereafter, the money is moved into the global financial payments system, which means these exchanges have effectively laundered 380,000 BTC, or $2.5 billion at today’s prices.
CipherTrace’s new study revealed 97 percent of direct bitcoin payments from criminals went to exchanges in countries with weak anti-money laundering laws. It also cites $927 million of cryptocurrency stolen during 2018 which criminals will have to launder.
Is The Worst Over?
Almost certainly not – the report, which looks at criminal activity and money laundering in the digital currency market, also showed a steadily growing number of smaller thefts in the $20-60 million range, totaling $173 million in the third quarter, reported Reuters. Digital currencies stolen from exchanges in 2017 totaled just $266 million, according to a previous CipherTrace report.
“This extensive research shows that regulation does have a direct correlation in hindering criminal activity, and we are on the right track to instill further trust in the crypto ecosystem,” said Dave Jevans, CipherTrace CEO and Co-Chair of the Cryptocurrency Working Group at the APWG.org. “We will see the opportunities to launder cryptocurrencies greatly reduced in the coming 18 months as cryptocurrency AML regulations are rolled out globally.”