Digital Assets: 2020 A Gravy Train for Crypto Bad Actors; $1.36B Siphoned in Five Months

June 3, 2020 | Digital Assets, News
https://dailyalts.com/wp-content/uploads/2020/06/dark-web-5030163_640.jpg

A report from Ciphertrace puts the spotlight on shenanigans in the crypto-assets sector.

CipherTrace’s latest report, “Cryptocurrency Crime and Anti-Money Laundering Report, Spring 2020,” claims that crypto-crimes during the first five months of 2020 netted their perpetrators $1.36 billion. At this rate, 2020 could well achieve the dubious distinction of recording the second-highest value in crypto crimes ever recorded. In 2019, crypto-criminals made off with $4.5 billion. (REUTERS)

Of hacks, thefts, fraud, and misappropriation

CipherTrace says the bulk of 2020’s criminal haul of $1.36 billion was attributable to fraud and misappropriation (98%) while hacks and thefts accounted for the negligible balance.

Coronavirus-related frauds and phishing sites abounded and were the MO of choice. Generally, victims were lured off genuine platforms into chat rooms to enter a crypto transaction.

The lion’s share of the $1.36 billion pickings went to a billion-dollar Ponzi scheme by Wotoken in China. Over 715,000 victims lost about $1 billion to criminal Wotoken operators.

“Consumers, investors, and users continue to adopt cryptocurrency at a massive rate and it is by far the fastest-growing payment system on the planet,” Dave Jevans, CipherTrace chief executive officer, told Reuters. “At one trillion dollars in annual payments, cryptocurrency payments have grown from zero to 7% in 10 years, making this volume of funds attractive to bad actors.”

Crypto exchanges and illicit funds

Finnish exchanges’ affinity for illicit funds continued for the third year in a row in 2019. They topped the charts – receiving 12.01% of BTC funds from criminal sources. LocalBitcoins, a peer-to-peer platform, accounted for 99% of these funds.

Russian exchanges received 5.23% of BTC from criminals. Of this, 86.8% came from Hydra Market—a Russian dark market.

Other insights

  • 74% of the bitcoin moved in exchange-to-exchange transactions were crossborder. This underlines the importance of the impending Travel Rule implementation
  • the global average of criminal funds sent directly to exchanges dropped 47% in 2019, suggesting improving efficiency of crypto AML measures
  • the percentage of funds sent to high-risk exchanges from US BATMs has doubled every year since 2017, indicating the possibility of money laundering

CipherTrace

CipherTrace is a data and cyber-security firm in the crypto-asset sector. It has developed the world’s most complete and accurate cryptocurrency intelligence and forensics, covering more than 800 currencies.

Related Story:  CipherTrace Q3 2019 Cryptocurrency Anti-Money Laundering Report Takeaways

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2021/04/bitcoin-4317828_640.jpg
Digital Assets: MicroStrategy To Pay Directors In Bitcoin
April 12, 2021     Digital Assets, News

In a unique plug for bitcoin’s adoption, MicroStrategy (NASDAQ: MSTR), the business information firm, has decided to pay its non-employee directors in bitcoin. The company has been a trendsetter, setting…

https://dailyalts.com/wp-content/uploads/2021/04/frog-1339894_640.jpg
Alternative Investments/Digital: Yet Another Bitcoin ETF Application; Galaxy Digital Is The Latest Hopeful

Galaxy Digital, the cryptocurrency investment firm led by Mike Novogratz, has filed an application with the SEC to launch a bitcoin ETF that will trade on the NYSE Arca. The…

https://dailyalts.com/wp-content/uploads/2021/04/DjDeFVDU4AAjJ26-scaled.jpg
Artificial Intelligence: Microsoft Eyeing Acquisition of Nuance Communications (Bloomberg)

Microsoft (NASDAQ: MSFT) may buy Nuance Communication (NASDAQ: NUAN) at a valuation of $56 per share, according to Bloomberg, which cited unnamed people who were familiar with the matter. The…

https://dailyalts.com/wp-content/uploads/2021/04/dollar-2891849_640.jpg
Venture Capital: Supervest, A Platform That Matches Loan-Seeking Merchants With Investors, Is Seeking Funds
April 12, 2021     FinTech, News, Venture Capital

Supervest calls it a new asset class. Merchant cash advances (MCA) are a form of short-term financing for merchants in the form of a sales agreement in which capital is…