California-based blockchain and cryptocurrency security firm CipherTrace released its Q2 2018 report this month and noted the rise of cryptocurrency crime, money laundering, and other illicit activities.
One particular item of note was that $1.3 billion has been laundered through cryptocurrency tools such as bitcoin tumblers and privacy-centric altcoins i.e zcash and monero.
Criminals Are Increasingly Adopting Cryptocurrency
On the back of increased awareness after 2017’s famous bull run, the report stated that nearly three times as much cryptocurrency was stolen in the first half of 2018 than all of the previous year. Furthermore, dark market lords and hackers are laundering money via digital assets as bitcoin tumblers, and privacy coins, are deemed as reliable options.
CipherTrace observed that criminals made away with $1.2 billion in cryptocurrency from exchanges in 2017-18, with the U.S. Federal Bureau of Investigation registering a six-fold increase in complaints, regarding cryptocurrency crime, in 2018 compared to 2015.
The report identifies criminals as the “early adopters of new tech” and considers it unsurprising that the pseudonymous nature of bitcoin propelled the rise in illicit activity. In particular, criminals may find the lack of identification, name, or bank details while using cryptocurrencies as beneficial to their line of “work”.
Ransoms Also On the Rise
Citing FBI statistics, the report also noted that cryptocurrency-related ransoms are on the rise. Over $58.8 million was stolen in 2017 in cyber-ransoms, largely in the pioneer cryptocurrency bitcoin and other related virtual assets. Meanwhile, on June 20, 2018, the Secret Service announced it had “seized over $28 million in cryptocurrencies in the course of our criminal investigations, primarily in the form of bitcoin.”
The Financial Crimes Enforcement Network (FinCEN) echoed the FBI’s concerns, with Thomas Ott, Associate Director of the Department of the Treasury’s bureau adding that the agency has “seen virtual currency exploited to support billions of dollars in what we would consider suspicious activity.”