Crypto theft has greatly reduced this year compared to last year as regulators continue to enhance their scrutiny and the enforcement of anti-money laundering controls.
Crypto Theft Could Hit $1 billion Mark
Despite being $500 million less than last year, crypto theft could still go well beyond a billion dollars by the end of this year.
A quarterly report released on May 1 by Cipher Trace indicates that investigatory specialists had found that over $356 million worth of crypto had been stolen in Q1 2019. The amount stolen includes the CoineBene and Cytopia exchange hacks and also the $195 million that was lost in December last year when Quadriga CX exchange founder Gerald Cotton died.
Projections of Cipher Trace indicate that crypto theft could hit $1.2 billion by the end of the year after a New York attorney general indicated that Bitfinex had misplaced around $850 million in crypto. The crypto market currently has a market capitalization of around $176 billion and the bulk of this is held by Bitcoin with a market cap of $94 billion, while Ethereum has a market cap of $17 billion. If the market loses $1.2 billion this year, this will be a 0.7% loss in the total value of the market.
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Intensifying Anti-Money Laundering Rules
Although crypto theft could hit $1.2 billion this year, this is significantly lower than the $1.7 billion that was reported in 2018 and a 400% increase relative to 2017. Stolen crypto assets and funds are mostly taken offshore where regulators cannot reach them.
Cipher Trace has indicated that in the last two years there has been a 46% increase in cross border crypto payments going from US exchanges to offshore platforms. The firm has also indicated that the number of regulators is currently growing across the globe and they have intensified KYC and AML rules. Cipher Trace indicates that such crypto regulations could lead to bans of privacy coins.
Featured image: DepositPhotos © BrianAJackson
