Crypto Crime In 2018 By The Numbers

One of cryptocurrency’s biggest selling points up to this point has been its anonymous nature, but that anonymity has given cryptos a bit of a nefarious reputation. While the cryptocurrency market has been subject to a wave of new regulations in 2018, a new report from CipherTrace indicates cryptocurrency-related criminal activity has exploded as well.

Useful Tool For Criminals

Criminals are on track to launder more than $1.5 billion via cryptocurrency trading in 2018, more than five times as much than as in 2017, according to CipherTrace. These numbers include only the laundering of stolen funds and not the total amount of illegal dark market transactions made using cryptocurrencies, which is difficult to estimate, the company said.

In addition to money laundering and illegal purchases, the theft of cryptocurrency itself has also skyrocketed this year. CipherTrace estimates that criminals and hackers have stolen roughly $1.21 billion in cryptocurrency from exchanges so far this year, up from the $713 million it reported last month.

The lack of regulation in the cryptocurrency market has made it a useful tool for criminals, who have flooded into the market to take advantage. A recent study by the University of Technology Sydney concluded that almost half of all global bitcoin transactions are associated with some form of criminal activity.

PayPal Of The Dark Web

The researchers said cryptos have essentially become the PayPal Holdings Inc, of the dark web.

“This sort of illegal activity risks stunting the adoption of this technology and limiting the potential benefits to society,” University of Technology Syndey Professor Talis Putnins said of the study.

While CipherTrace said some criminals are using sophisticated money laundering mixing services or cross-currency flip services, most launderers are simply purchasing cryptocurrency with stolen funds, transferring that money directly to a bank account and assuming nobody will file a suspicious activity report.

Uphill Battle For Regulators

For cryptocurrency investors hoping that currencies like bitcoin and Ethereum will become mainstream payment methods in the future, it may be a long, uphill battle before regulators and financial institutions are comfortable enough to deem cryptos safe and transparent enough to give the green light. In the meantime, criminals will continue to exploit the vulnerabilities in the cryptocurrency system and investors will suffer the consequences.

Wayne Duggan , Benzinga Staff Writer

July 17, 2018

https://www.benzinga.com/markets/cryptocurrency/18/07/12030432/crypto-crime-in-2018-by-the-numbers