MENLO PARK, Calif.—In a theft described as “easier than robbing banks,” criminals are stealing more cryptocurrency from exchanges, and that’s driving growth in a cottage industry of services that allow for money laundering of coins, according to a new report.
In the first half of the year, more than $760 million in cryptocurrency was stolen from exchanges—nearly three times more than in all of 2017, CipherTrace said in its initial quarterly report on the subject.
CipherTrace is a blockchain security firm that works with more than 40 companies and governments to trace crypto transactions, Bloomberg explained.
The current market value of the top 100 cryptocurrencies is around $270 billion, according to CoinMarketCap.com. Services that clean dirty funds are widely available, CipherTrace told Bloomberg, and some have even advertised through Google AdWords.
‘New Set of Criminals’
“There are so many cryptocurrencies now, and they are worth so much money, and there are so many exchanges globally where you can cash out, that we’ve seen not just traditional cyber gangs but we’ve seen a new set of criminals enter this space,” CipherTrace CEO David Jevans told the publication. “This overall market expansion has created a whole new generation of cyber criminals that didn’t exist 15 months ago.”
Crypto coins number more than 1,600, and tracking them all is increasingly difficult—which gives criminals an opening, said Bloomberg.
“Regulators have said that many exchanges and startups issuing new coins still don’t do enough to check customer identities and verify that users aren’t laundering stolen funds. Users buying and selling coins are typically represented by anonymous addresses,” Bloomberg noted. “Meanwhile, many exchanges—and new ones are opening all the time—have security vulnerabilities. And cryptocurrencies, once stolen, often can’t be returned or even traced to the thieves.
“It’s a lot easier than robbing banks,” Jevans said.