Bitcoin THEFT to hit $1.5 BILLION in 2018 ‘huge risks’ forecast

A new report from US-based cybersecurity firm CipherTrace shows how cryptocurrency exchanges are becoming a soft target for hackers and cyber criminals with the direct theft of coins already soaring to three times the amount in the first half of 2018 compared to the levels recorded for the whole of 2017.

The report, which looks at the global anti-money laundering market, estimates that the losses could rise to £1.12 billion ($1.5 billion) this year.

Dave Jevans, chief executive officer of CipherTrace said: “Stolen cryptocurrencies are three times bigger this year than last year so the trend is obviously not our friend here.”

He added that stolen virtual currencies end up being laundered to help criminals hide their true identities and avoid arrest, which has resulted in a three-fold rise in money laundering of cryptocurrencies.

The most recent theft from a cryptocurrency exchange was the $32 million in digital currencies stolen from South Korean exchange Bithumb.

Following the theft, Mun Chong-hyun, chief analyst at ESTsecurity, said digital coins would continue to be appealing targets for hackers around the world.

He said: “No security measures or regulations can 100 percent guarantee safety of virtual coins.

“It is held anonymously and in lightly-secured systems, which makes them an irresistible target.”

However the surge in cryptocurrency crime has attracted the attention of global regulators and law enforcement.

Joseph Carson, Chief Security Scientist at Thycotic told Express.co.uk that digital currency crime affects how central banks, governments and institutional investors view bitcoin and cryptocurrency technology.

He said: “The risks from digital currencies are huge.

“The main types of crime using digital currencies today is mostly with tax avoidance, illegal drugs, cracked software or counterfeit goods, while you can purchase legal goods like pay for hotels, music or even buy a house but the majority of digital currencies are used for illegal purposes.

“Unfortunately, the hype led to many investors seeing it as a quick win though that bubble will likely come to reality in the near future. Digital currencies are absolutely a good thing but before people start paying for daily goods a clear stable and scalable digital currency will have to be decided.”

Mr Carson said cryptocurrencies need to be stable, accepted and regulated to ensure that everyone can use them successfully. He said: “The main reason why crime has excelled is because the currency is decentralised and money can be moved across borders without the government knowing.”

In January this year Coincheck, one of Japan’s largest digital currency exchanges announced that it had lost £380 million ($534million) worth of virtual assets in a hacking attack on its network.

The theft is the largest involving digital currency but the attack knocked NEM, the 10th-largest crypto-currency by market value, by 11 percent over a 24-hour period to 87 cents, bitcoin dropped 3.4 percent and ripple shed 9.9 percent after the hack.