Author: Cryptocurrency intelligence company tracking crimes involving digital assets – CipherTrace – said in its latest report that crypto thefts, hacks, and frauds totaled $1.4 billion in the first five months of 2020.
Cryptocurrency exchanges are becoming more aware of illegal funds coming from crimes and are implementing successful countermeasures, the firm added.
$1.4B Worth Of Frauds In 2020 So Far
According to the paper dubbed Spring 2020 Cryptocurrency Anti-Money Laundering and Crime Report, the most significant contributor to the massive amount is the Chinese fraudulent project – Wotoken. As CryptoPotato reported recently, the Ponzi scheme resembling the notorious PlusToken stole an estimated amount of over $1 billion from 715,249 victims.
Outside of Wotoken, another major fraudulent market share went to coronavirus-related scams. The sudden outbreak of the COVID-19 pandemic harmed people’s health and world economies, but cybercriminals tried to capitalize with numerous innovative scams duping victims.
Reports on the matter indicated that during the most intense periods of the pandemic, scammers used various methods, such as impersonating popular health and charity organizations. Despite differences in terms of content and requests, the cybercriminals ultimately asked a payment done in Bitcoin.
The rapid surge of similar scams even got the FBI’s attention. The Bureau issued an official warning advising people to act with more caution when receiving anything even remotely associated with the COVID-19 pandemic.
The combined efforts of these and a few other cryptocurrency-related frauds had totaled $1.36 billion from January to May this year and are “vastly exceeding hacks in thefts.” Hence, 2020 could “see the second-highest value in crypto crimes ever recorded,” trailing only to 2019’s $4.5 billion.
AML Measures Improved But So Are Criminals
The report indicated that digital asset exchanges have been more successful in implementing Anti-Money Laundering measures and more efficient KYC rules in 2020.
Thus, the paper explained that “the global average of direct criminal funds received by exchanges dropped by 47%. This suggests that many criminals are finding it harder to offload their illicit funds directly to cryptocurrency exchanges.”
Nevertheless, criminals are “getting savvier” by expanding their methods of operations. The document outlines a particular “examination of one prominent darknet marketplace revealing that risk exposure to exchanges tripled for interactions two-hops out compared to one hop out.”
For the third consecutive year, cryptocurrency platforms based in Finland have received the most substantial amount (12.01%) of Bitcoin funds from criminal sources. The popular Finnish peer-to-peer marketplace LocalBitcoin is responsible for 99% of that share.
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