Crypto Hacks Are on Track to Eclipse $1 Billion in Lost Funds This Year

Crypto security and intelligence firm CipherTrace has published its Q1 2019 Cryptocurrency Anti-Money Laundering Report, revealing that exchange platforms all over the world have lost nearly $400 million as a result of hacks and thefts.

Hacks Are Making Bank

According to the firm, the report is based on an analysis of 164 million Bitcoin-based transactions.

It paints a particularly bleak picture of asset security, revealing that in 2019 so far, thefts incurred as a result of crypto hacks have amounted to $356 million.

The company believes the number could very well hit $1.2 billion by the end of the year at this pace.

Its Cryptocurrency Anti-Money Laundering Report for Q3 2018 revealed that hackers were able to steal $927 million from exchanges and other crypto platforms within the first nine months of the year.

The report also contained a forecast of $1 billion in crypto asset thefts before the turn of the year, and if the Q1 2019 report is anything to go by, numbers should be eclipsing that estimate much sooner than December.

Monitoring Challenges

Additionally, CipherTrace’s report reveals that there has been a 46 percent uptick in cross-border payments from U.S. exchanges to offshore platforms from Q1 2017 to Q1 2019.

The firm’s researchers suggest that this could signal an oversight difficulty with regulators, as payments that are being made overseas “fall off the radar of U.S. authorities.”

Regulations Are Coming

The report predicts, however, that the introduction of new AML and Counter-Terrorist Financing (CFT) regulations to the global crypto industry will make it difficult for scammers and thieves to launder their loot and make it “clean.”

“As of April 2019, 17 countries plus the European Union within the jurisdiction of the Financial Stability Board had at least some regulation or standard-setting bodies dealing with cryptocurrencies. These bodies will be responsible for implementing regulations that enforce FATF policy and AMLD5.”

Pointing out some of the more substantial cases of crypto hacks, the report suggests these sorts of events should spur governments and regulators to take a harder look at the security operations and internal controls of crypto exchanges. While the implementation of sterner rules might not sit well with exchange operators and countries, the additional oversight could bring about an improvement in exchanges’ security.