Thefts and scams are plaguing the crypto space, which saw US$1.7 billion worth of cryptocurrencies being stolen and scammed in 2018, a sharp increase despite a slump in the market, according to the CipherTrace 2018 Q4 2018 Cryptocurrency Anti-Money Laundering Report.
Theft from cryptocurrency exchanges accounted for the majority of last year’s criminal activities with more than US$950 million being stolen by hackers in 2018, representing 3.6 time more than in 2017. Korea and Japan were home to most of the thefts, or 58% of all of last year’s cryptocurrency exchanges heists, the research found.
Meanwhile, cryptocurrency exit scams such as fraudulent initial coin offerings (ICOs), phony exchange hacks and Ponzi schemes, generated US$725 million worth of cryptocurrencies in 2018.
One recent exit scam involved a Korean group called Pure Bit, which raised nearly US$3 million in an Ethereum ICO purported to be used to build a cryptocurrrency exchange. The founders were quick to disappear with all the funds before suddenly changing their minds and announcing[1] plans to refund investors.
In Vietnam, a company named Modern Tech launched an ICO raising US$660 million before the team disappeared[2] with the funds.
Cryptocurrency related crimes continue to increase despite the so-called “crypto winter.”
The cryptocurrency market continues to decline this year after loosing 84% of market capitalization in 2018, according to data[3] from CoinMarketCap.
Bitcoin has lost 81% of its value since its peak of 19,600 USD on December 17, 2017. The cryptocurrency was trading at about 3,500 USD on February 1, 2019.
Ether has taken even a bigger hit, loosing 92% of its value between January 13, 2018 at an all-time high of
