Over $1.5 Billion Stolen From Crypto Exchanges In 2018

More than $1.5 billion was stolen from cryptocurrency exchanges, ICO exit scams and custodial services last year. This is a dramatic rise from the year before, despite the markets slow plummet. According to the fourth quarter CipherTrace Cryptocurrency Anti-Money Laundering Report, the stolen money needs to be laundered.

With the international wave of regulations going into effect this year, laundering cryptocurrency will be an act that is much harder to pull off.

The CEO of CipherTrace and co-chairman of the Cryptocurrency Working Group at the APWG.org, Dave Jevans sat down with CCN recently to explain crypto money laundering. For those that don’t know, CipherTrace is a company that develops cryptocurrency AML, forensics and blockchain threat intelligence solutions.

Of the overall stolen funds in 2018, the majority came from exchanges and custodial services with more than $950 million. This was 3.6 times more than the year prior with $266 million and $152 million stolen in 2016. Despite all this, the question still remains as to why this was? One of the reasons behind this will be due to the massive surge that brought Bitcoin to its all-time high of $20,000, but as Jevans explains, there was something more behind this...

“Many exchanges have only been operational for two years or less. They have not invested in the security technologies and practices needed to safeguard IT systems, employees, and critical data. These cryptocurrency companies are at risk of having a simple file of cryptographic private keys stolen that can give the hackers $30M to $500M in profit. Yet these companies are immature in their security team funding, training and implementation.”

The CEO of CipherTrace believes that the cryptocurrency space needs to have a bigger amount of infrastructure investment, as well as education, to prevent such attacks. In addition, cold storage of private keys, strong anti-phishing measures are included. “The APWG can help with this,” says Jevans. “Two-factor authentication of employees and customers will also help, as well as the use of ephemeral instances to reduce attackers’ chances of getting into more machines outside the exchange.”

On top of being the founder and CEO of CipherTrace, Jevens has 17 patents in computer security and cryptography and also tracks criminal activity and correlating it with the price fluctuations of Bitcoin since 2011.

What are your thoughts? Let us know what you think down below in the comments!