Losses from the theft of cryptocurrencies from exchanges and fraud-related activities surged in the first quarter of the year to $1.2 billion, or 70 percent of the level for all of 2018, cybersecurity firm CipherTrace said on Tuesday.
The value of losses from crime in the digital currency sector in 2018 hit $1.7 billion. But cryptocurrency crime has ballooned as the market has slowed down, prices have plunged and business activity has stalled.
In the first quarter of 2019, theft of digital currencies from exchanges and scams totaled $356 million, while losses from fraud or misappropriated funds amounted to $851 million, the respected US-based CipherTrace said in a quarterly report.
CipherTrace said it included losses at Canadian digital platform QuadrigaX, where roughly C$180 million (US$134 million) in cryptocurrencies have been frozen in user accounts after the founder, the only person with the password to gain access, died suddenly in December.
"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," CipherTrace chief executive officer Dave Jevans told Reuters.
An analysis of 164 million bitcoin transactions showed that cross-border payments to offshore exchanges have grown 46% over the last two years, contributing to the $8.7 trillion, or 11.5 percent of the world's wealth, hidden offshore, the report said.
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