In a report recently published by CipherTrace, which enables the blockchain economy by protecting cryptocurrency companies and financial institutions from security and compliance risks, said fraudsters, malicious hackers and thieves have accumulated $1.36 billion crypto acquired by unfair means through the first five months of 2020.
Considering the 2019’s record $4.5, this year’s theft has been ranked as the second-costliest year in the history of crypto by the firm. This year’s running total largely comes from a single fraud: Wotoken which has funds in 46,000 bitcoin, 2.04 million ethereum, 292,000 litecoin, 56,000 bitcoin cash and 6,84,000 EOS are still are in the process of moving.
Chief financial analyst at CipherTrace said it was a classic pyramid scheme and the scheme’s alleged perpetrators are now on trial in China. Wotoken underscores the continued rise of fraud but the last year’s fraudulence was more.
With the maturing of the industry, a number of exchanges are expanding their security and even after that hackers are breaking the security. All these fraudulences indicate to closure regulation of cryptocurrency business. There should be protest against money laundering and counter terrorist financing.
Upgrading felonious tactics
Keeping eyes on darknet wallets sending crypto to exchanges, CipherTrace saw over 30% of transfers took an interim step where just under 10% of transfers went directly. Only 17% of illegal crypto that landed at exchanges got there directly in 2019. Criminals are upgrading their tactics and becoming mature.
In the U.S. transferring of bitcoin from ATMs to ‘’high risk’’ exchanges continue to grow at an exponential rate. Traceability hides the cryptocurrency’s sources but they lift up the risk of an exchange unwillingly laundering criminal funds.
The Travel Rule
A vast number of exchange-to-exchange bitcoin transfers crossed international border in 2019. So, collecting and sharing exchange users’ information has become slightly difficult to Financial Action Task Force (FATF). Tech created to help exchanges comply with FATF’s travel rule is ready for implementation. It is hoped that maybe in future, bitcoin transfer will happen in ‘’siloed environment.’’
