A report from U.S.based cybersecurity firm CipherTrace has indicated a theft of $927 million from cryptocurrency exchanges in the year 2018.
The report says that in total, cryptocurrencies stolen from exchanges and scammed from investors surged more than 400 percent in 2018 amounting to approx $1.7 billion.
Korea and Japan are the most affected ones and constitute 58 percent of the total thefts from exchanges.
The numbers on crypto theft surprised many observers given the price declines in digital currencies in 2018. The market capitalization with more than 1,600 digital currencies was $112 billion in January, 2019, down more than 80 percent from its peak a year earlier.
In addition to those thefts, the research found that investors and exchange users lost about $725 million in cryptocurrency in 2018 to exit scams such as fraudulent initial coin offerings, phony exchange hacks, and Ponzi schemes.
Majority of the bigger attacks got their own headline this year, but the “smaller” thefts were still substantial and ranged from $20 million to $60 million. The total of this group added up to $166 million by the second quarter.
The
report says "
This data indicates a pattern of smaller robberies on a regular basis and sophisticated professional cyber thieves who carry out hacks at both the exchange and platform levels by capitalizing on exposed vulnerabilities, as well as by socially engineering employees who work at these companies."
While for the first three quarters, thefts by hackers dominated the crypto crime scene, but the final quarter was mostly about inside jobs or fraud.
"So we have seen in 2018 a lot more exit scams where companies disappear and steal people's money. There's a huge increase in that,"
"These bad actors are clearly flocking to jurisdictions with weak AML (anti-money laundering) and know-your-customer (KYC) regimes, because in our Q3 report we published the results of research showing 97 percent of criminal bitcoin flows into unregulated cryptocurrency exchanges," the report said.