A surge in theft from cryptocurrency exchanges and fraud-related activities has seen around $1.2 billion worth of crypto get stolen in the first quarter of this year. The amount is equivalent to 70% of all crypto funds stolen throughout 2017.
According to a report published by US-based data security firm CipherTrace, the first quarter of this year has seen hackers steal $356 million from cryptocurrency exchanges, and fraud or fund misappropriation take $851 million worth of crypto from users.
Earlier this year, a report published by the same firm revealed that a total of $1.7 billion worth of cryptocurrency were lost to thefts and scams. The figure was already 3.6 times higher than in 2017, and seven times higher than in 2016.
According to Reuters, CipherTrace’s report for Q1 of this year included the QuadrigaCX ordeal, that saw the exchange get locked out of $145 million worth of crypto after his founder, the only person with access to its cold storage wallets, suddenly passed away in December of last year.
CipherTrace’s chief executive officer, Dave Jevans, was quoted as saying:
Crypto crime has gotten worse because regulations are still weakly enforced. Europe broadly has not implemented its regulations yet and the cyber criminal community continues to grow.
Jevans added that he would add that “insider issues such as fraud or theft have grown mostly due to operations outside of the U.S. where regulations are poor.” This, he claims, because of “greed and mismanagement” by teams who are ahead of cryptocurrency companies with millions to manage.
The data security firm’s report notes there’s a major gap in the currency regulatory environment for cryptos when it comes to cross-border payments from US exchanges to offshore exchanges.
Per Reuters an analysis of 164 million BTC transactions showed cross-border payments to offshore exchange grew by 46% over the last two years, contributing to the amount of wealth ‘hidden offshore.’
Notably, as recently covered cryptojacking incidents have seen a significant drop, as a popular mining script provided by CoinHive is no longer active. Nevertheless, malware is still out there trying to get to cryptocurrency users, as French crypto hardware wallet manufacturer Ledger warned against a ‘highly targeted’ malware hitting its users.