By Olga Kharif
Criminals are stealing more cryptocurrency from exchanges, and that’s driving growth in a cottage industry of services that allows 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 Menlo Park, California-based blockchain security firm that works with more than 40 companies and governments to trace crypto transactions.
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 said, and some have even advertised through Google AdWords.
“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,” Chief Executive Officer David Jevans said in a phone interview. “This overall market expansion has created a whole new generation of cyber criminals that didn’t exist 15 months ago.”
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.
Regulators globally are likely to crack down on crypto money-laundering, Jevans said. While that’s probably good for investors, some coins could suffer.
“There are going to be small coins kicked off exchanges because it’s going to be difficult to track transactions,” he said.