More than $1 billion lost to cryptocurrency scams and frauds in Q1 2019

The amount of capital stolen in cryptocurrency-related scams and fraud has toppled $1.2 billion in the first quarter on 2019, according to blockchain analytics firm CipherTrace.

These numbers include the alleged $851 million loss by leading cryptocurrency exchange, Bitfinex, with the New York Attorney General’s Office issuing a court order this week.

Also included is the $195 million lost from the Quadriga CX scandal, which saw client’s funds being lost due to the sudden death of the exchange’s owner Gerald Cotten, who was the only person with access to the company’s cold wallets.

“Cyber criminals also developed ingenious new techniques to drain millions more from user accounts and wallets. These thefts only represent the losses that are visible. CipherTrace estimates the true number of crypto asset losses was much higher”, CipherTrace said in an official statement.

While the amount of capital stolen through cyber-crime is on the rise, CipherTrace claim that a “significant wave of regulation” is coming to the cryptocurrency economy.

“A tsunami of tough new global anti-money laundering (AML) and counter-terror financing (CTF) regulations will roll over the crypto landscape in the coming year.”

In order to combat the increasing amount of cyber-crime, regulators are looking into the potential of banning privacy coins like Monero and ZCash as they are commonly used by criminals attempting to launder funds.

“Regulators are beginning to recommend bans on privacy coins, as criminals are coming to prefer these new anonymous altcoins to bitcoin because they are more difficult to trace.” CipherTrace wrote. “Banks also continue to face problems coping with the coming wave of regulations as they increasingly recognise there are undetected cryptocurrency operations that are using their fiat payment networks and customer accounts.”

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