Roughly $5 billion worth of cryptocurrency was stolen from investors in the first half of 2019, according to a new report from CipherTrace Cryptocurrency Intelligence.
Despite efforts of crypto-related services to strengthen their safety, this didn’t stop bad actors from making money in the last six months to the tune of $4.26 billion, marking an increase of more than three times relative to the $1.7 billion that went down in 2018. And that’s just what the security firm was able to spot as the true number of crypto assets lost to hackers is likely much larger.
As prices marched higher in 2019, crimes went up, says CipherTrace. The increase in cryptocurrencies prices meant a higher total value for these stolen coins; still the volume of coins stolen in 2019 was also more than two times than it was in 2018. It also means that those scams aren’t expected to decline in the remainder of the year, despite efforts to clamp down on the industry.
CipherTrace, which is out with its Q2 2019 Cryptocurrency Anti-Money Laundering (AML) report, found that of the $4.26 billion hackers stole, more than $125 million came from cryptocurrency exchanges last quarter.
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Major hacks still plague crypto space
The report highlights the massive hacks occurred in the space over the last three months, which it describes as one of its biggest challenges to mainstream adoption and acceptance by regulators.
Popular scams in 2019 include Binance hack in May where the world’s prominent cryptocurrency exchange suffered a sophisticated cyberattack that saw hackers make away with 7,000 BTC in a single transaction. Investors also lost almost $3 billion worth of crypto deposits in the alleged “exit scam” of South Korean wallet PlusToken where founders simply ran off with the funds of nearly three million registered users.
QuadrigaCX was another tragedy in the crypto space following the sudden death of its founder and CEO Gerald Cotton in December. The five-year-old business reportedly has $190 million in missing cryptocurrency which is locked in offline digital wallets while Cotton was the only person who had the password to the company’s wallets.
In addition to outright thefts, the report also highlights the growing threats of “SIM-swapping” scams, where a hacker takes over a victim’s mobile device to steal credentials, then breaks into his wallets. Earlier last year, telecommunications giant AT&T Mobility (NYSE: T) found itself on the end of a lawsuit after a customer accused it of allowing hackers to swap his SIM card, in what appears to be an elaborate scheme by fraudsters.