The figure which is nearly five times the amount of money lost through the entire last year takes into consideration reported stolen funds tied to cryptocurrencies. The figure could have been much higher had it taken into account market transactions in the dark web involving cryptocurrencies.
Cryptocurrency's Skyrocketing Money Laundering Problem
CipherTrace CEO Dave Jevans discusses recent research on cryptocurrency money laundering and whether regulation is possible #podcast #cryptohttps://t.co/L7aFL7y1dZ pic.twitter.com/Izkz1lV7Tc
— ciphertrace (@ciphertrace) July 6, 2018
Cryptocurrencies theft in exchanges has skyrocketed this year in addition to money laundering and illegal purchases. CipherTrace initial estimates indicate that criminals and hackers could have stolen as much as $1.21 billion worth of cryptocurrencies in the first half of the year, compared to $713 million for the entire of last year.
A lack of regulations to govern the cryptocurrency space appears to be the main catalysts behind the increased cases of illegal activities in the emerging industry. A lack of clear-cut regulations is seen as one of the reasons why some exchanges have not put adequate controls measures to keep hackers at bay.
In addition to money laundering involving cryptocurrencies, illegal cryptocurrency mining is slowly emerging as the next big threat to the industry, bigger than ransomware in the mainstream world. A report by Skybox Security indicates that crypto miners account for as much as 32% of cyber-attacks compared to just 8% for ransomware.
Cryptojacking involves crypto miners embedding codes in websites and devices all in the effort of harnessing computing power from the victims that in return is used for mining various digital currencies.
In a report published by Skybox, the company said: “Cryptocurrency miners may be the new kid on the block, but they’re taking over. With high-profit opportunity and a low chance of being discovered or stopped, this malware tool provides a money-making safe haven for cybercriminals,”.
The Biggest Cryptocurrency Thefts
The largest cryptocurrency thefts have mostly targeted Cryptocurrencies exchanges given what is at stake as well as the lack of sufficient security control measures to avert attacks.
Tokyo-based cryptocurrency exchange Coincheck holds the record for the biggest security breach that resulted in the loss of 500 Million NEM tokens valued at about $530 million. The company has never owned to security lapse or that the breach might have been an inside job even on identifying 11 addresses that were responsible for the hack.
The second biggest hack targeting cryptocurrencies involved VC-funded oak Company Parity Technologies. A parity user is believed to have found a bug in the company’s digital wallet, Parity Wallet, and used the loophole to siphon $275 million worth of Ethereum (ETH) cryptocurrency.
Italy’s cryptocurrency exchange BitGrail holds the record for the third biggest security breach that resulted in the loss of cryptocurrency worth $195 million. During the hacking incident, around 17 million Nano (XRB) tokens were stolen with most people claiming it was an inside job.
Bitcoin Mining marketplace NiceHash was hacked towards the end of 2017 in what the management said was a highly professional attack resulting in the loss of nearly $63 million worth of Bitcoins. The hackers reportedly used insider credentials to steal the tokens.