CipherTrace Report Examines Fraud in Cryptocurrency Side of Mobile Payments

January 31, 2019         By: Steven Anderson

We all know that cryptocurrency is easily one of, and arguably the, most volatile markets in mobile payments, and a new report sent our way from CipherTrace shows that this volatility extends everywhere. It’s not just about coin prices, as its Q4 2018 Cryptocurrency Anti-Money Laundering Report detailed; it’s also about just how much cryptocurrency got stolen last year.

The CipherTrace report makes it almost terrifyingly clear: various thieves and scammers came together to produce $1.7 billion in cryptocurrency theft of one variety or another in 2018. The report also makes it clear that said thieves and scammers should enjoy their victory while they can, as it’s not likely to be repeated, and it may not even be complete.

Starting in 2019, the report notes, several new regulations will go into effect surrounding anti-money laundering (AML) and counter-terror financing (CTF), which will target cryptocurrency with a particular elan. A little over half of that, $950 million was taken directly from the exchanges themselves.

That’s 3.6 times higher than the amount taken in 2017, which makes it clear that tougher regulation might well have been called for in the face of a whole lot of theft and fraud. The remaining amount was taken on the strength of a range of other scams, including exchange hacks, ICO exit scams, and Ponzi schemes.

Even CipherTrace admits that its numbers may not be complete; it notes that these numbers “only represent the loot from crypto crimes that CipherTrace can validate.” However, since cryptocurrency prices were almost universally down in the fourth quarter against the third, the total amount of theft actually declined as a result.

New regulations are poised to take hold all over the world, and in some places, have already. With that in mind, the cryptocurrency market might be a more attractive buy than it’s been in almost two years. Indeed, for those who didn’t exactly get in very hard, the possibilities are substantial; not only are prices lower than they’ve been in a while, there are several new protective measures.

Only time will tell just what kind of impact this has, but we might not be hearing about catastrophically high fraud and theft figures this time next year. Or even next quarter.