The rate of cryptocurrency theft in the first quarter of 2019 has already reached 70 percent of what cybercriminals stole in all of 2018, accounting for an estimated $1.2 billion in losses, according to recent research.
A report from CipherTrace revealed that cyberthieves stole $356 million through targeted attacks on exchanges and scams that dupe people into providing access to their digital wallets. Misappropriation of funds and fraud activity led to even greater losses, totaling $851 million in 2019 so far.
In contrast, it took all of last year for cryptocurrency theft to reach $1.7 billion, suggesting that the total will be far higher by the fourth quarter.
Cryptocurrency Thieves Get Creative
The researchers noted a rise in insider threats and a wider variety of threats overall targeting cryptocurrency. Examples include the kidnapping of a Norwegian billionaire’s wife, the perpetrators of which demanded roughly $10.3 million in Monero as a ransom payment.
Other incidents involving various cryptocurrency exchanges suggest that misappropriation of funds is on the rise. One firm was responsible for $195 million in losses alone when its founder died without providing access to the exchange’s account passwords.
Perhaps not surprisingly, the report noted that regulators around the world are struggling to determine how best to protect those making payments through cryptocurrency exchanges. That means cross-border payments — transactions between an exchange based in the U.S. and one based outside of local authorities’ jurisdiction — can benefit money launderers. Offshore exchanges have already gotten $8l7 billion through cross-border payments, an increase of 46 percent over a two-year period. This represents 11.5 percent of “hidden wealth,” according to the study.
How to Curtail Cryptocurrency Theft
In 2018, IBM X-Force Research showed how criminals can use well-known malware such as Trickbot to make users think they’re putting money in their own cryptocurrency wallet when, in fact, it’s being directed to one that’s controlled by cybercriminals. Advanced malware and fraud detection tools can help identify potential risks, assess the level of severity and determine which devices have already been infected, may be the best.
Writer & Editor
Shane Schick is a contributor for SecurityIntelligence.