Security & Fraud

Report: Crypto Crime Could Reach $4.3B This Year

A new report has estimated that losses related to cryptocurrency thefts, scams and fraud could reach $4.3 billion this year.

Cryptocurrency security firm CipherTrace revealed that crypto criminals have already stolen more than $1.2 billion in the first quarter of 2019. Criminals stole more than $356 million in crypto from exchanges and infrastructure during the first quarter of 2019, with exit scams — where founders of crypto companies make off with the money — took nearly $195 million from crypto users.

“On top of these numbers, the New York Attorney General’s Office revealed what they allege is a fraud involving the loss of $851 million by a major cryptocurrency exchange, Bitfinex. Cybercriminals also developed ingenious new techniques to drain millions more from user accounts and wallets. These thefts only represent the losses that are visible. CipherTrace estimates the true number of crypto asset losses was much higher,” the company stated.

In addition, CipherTrace found that cybercriminals have developed new techniques to steal from user accounts, including reassigning a user’s smartphone SIM card and using two-factor authentication to create a new account password.

The research also showed major shortcomings in certain crypto regulations, with cross-border bitcoin payments from U.S. exchanges to offshore exchanges rose from 45 percent from the 12 months ending Q1 2017 to 66 percent in the 12 months ending Q1 2019.

The company added that this finding is significant since it's been reported that $8.7 trillion, 11.5 percent of the world’s wealth, is hidden offshore.

“Ultimately, thieves and scam artists will need to launder the cryptocurrency stolen or scammed in Q1 2019. Furthermore, this will require innovative new ways to cash out, and turn all that tainted virtual money into clean, spendable fiat currencies. And they will also need to get it done under the much more watchful eyes of government regulators and banks as a tsunami of tough new global anti-money laundering (AML) and counter-terror financing (CTF) regulations will roll over the crypto landscape in the coming year,” according to the report.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.