If you’re ever so unfortunate as to become the victim of a bitcoin theft, there’s very little chance that you will ever see your cryptocurrency assets again.
For this reason, security experts have suggested that only a fraction of these cases ever get reported, as victims believe they are not likely to retrieve stolen cryptocurrency. Reuters reports that the unique nature of cryptocurrencies has created a double-edged sword where investors do not expect criminals to be caught after successful crypto heists, and cybercriminals are turning to crypto in larger numbers, driven by the perception that it offers them complete insulation from the law.
Peculiar Challenges
Alluding to the unique nature of bitcoin and other cryptocurrency assets — and the peculiar security problems they pose — Patrick Wyman, supervisory special agent in the financial crimes section of the FBI anti-money laundering unit, said:
“A decentralized currency system like bitcoin or another form of virtual currency is not governed by any entity, suspicious reporting activity, and any anti-money laundering compliance.”
The cryptocurrency market is a fast-growing one, and so also is the associated crime, the data reveals. Security professionals believe the high rate of these crimes is why investigators tend to be more preoccupied with high-profile cases, while small investors are left unattended. Jaroslav Jakubcek, an analyst at Europol — the center of EU’s law enforcement cooperation, expertise, and intelligence — told Reuters that it is impossible for every law enforcement agency to commit resources to every crime.
Autonomous NEXT and Crypto Aware, a financial research firm that collaborates with victims of crypto scams, estimated that about $1.7 billion worth of cryptocurrencies, were stolen between 2012 and the first half of 2018. The data also reveals that over $800 million has already been stolen this year. Per the research, approximately 85% of crimes are never even reported.
20 Percent Recovery Rate
Quoted in the Reuters report, David Jevans, CEO of California-based CipherTrace, stated that only about 20 percent of stolen crypto ever is recovered, even when trading platforms or exchanges are hacked, owing to the ease with which tokens can move across different borders. Following protocol, getting law enforcement in several countries involved, and gathering evidence to open a case usually takes a long time, and by the time this is done, the money has been moved. The money at stake has to be huge to justify the efforts.
Moreover, the targets are just large cryptocurrency exchanges. In August, CCN reported that U.S. entrepreneur and cryptocurrency investor Michael Terpin had $24 million in crypto stolen from his mobile wallet by sim hackers, causing him to him file a $224 million suit against his service provider AT&T, who denied responsibility.
Just this week, a 24-year-old Norwegian bitcoin investor was murdered shortly after exchanging a large amount of cryptocurrency for cash. According to reports, the perpetrator may have been after those proceeds, which he was keeping in his apartment.
Featured Image from Shutterstock
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