Topic: [2018/07/07]cryptocurrencies stolen from exchanges tripled to $761M (Read 92 times)

   
CipherTrace: the amount of cryptocurrencies stolen from exchanges tripled to $761M in the first half of 2018 compared to all of 2017, may reach $1.5B this year

Three times more cryptocurrency was stolen from exchanges in the first half of 2018 than all of 2017, with a corresponding boost in money laundering related to crypto, according to a report released Tuesday by CipherTrace.

The results appear to confirm fears by bankers who stay away from cryptocurrency business due to concerns about crime and money laundering.

“We’re basing it on things we have seen directly,” said Dave Jevans, CEO of CipherTrace, which monitors cryptocurrency transactions for signs of financial crime.

In the last two years alone, criminals have stolen $1.21 billion in cryptocurrency from exchanges, the report said.

While outright theft tripled in the first half of 2018, money laundering increased at a similar rate. In 2017, $266 million was laundered via crypto. So far in 2018, that figure stands at $761 million. That is just the laundering of stolen funds, not a complete estimate of all dark market transactions using crypto (which is harder to track with certainty).

“That puts us on track for this year to probably see about $1.5 billion stolen through cryptocurrency, based on trends,” Jevans said.

Bitcoin supporters argue cryptocurrency is not anonymous, that their transactions can be connected to the addresses at which they receive bitcoins. If those addresses are ever tied to their personal identity, their cryptocurrency movements can be fully visible.

So how do crypto users manage to stay anonymous and launder their dirty digital currency?

One way is through using money laundering mixing services, Jevans said.

“These let people contribute funds into a combined pool that will scramble them up and try to use a different pool of liquidity that is not trackable on the blockchain, so there’s no linkage between them to deliver funds out to the receivers,” Jevans said. “These are written by highly skilled people who may have Ph.D.s, that are actively trying to avoid tracing.”
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Some money laundering mixing services have run paid ads on Google, he said.

“These guys are making quite a bit of money off these services,” Jevans said. “They typically charge around 3% to perform a laundering transaction.”

Another way is to use cross-currency flip services like ShapeShift.io. These can have legitimate uses, but they can also be used to take bitcoin, flip it into Ethereum and into another currency before turning it back into bitcoin. “You create this cross-currency monetary flip that is extremely difficult to correlate and track,” Jevans said.