Cryptocurrencies Slump; Crypto-thefts Reach About $1 Billion This Year

Oct 11, 2018

Major cryptocurrencies plummeted on Thursday morning in Asia, impacted by a bearish market and a new report that found cryptocurrency thefts in the first three quarters of this year hit $927 million.

Bitcoin suffered less than other major cryptocurrencies, falling just 5.8% to $6,309.4 by 10:47PM ET (02:47 GMT) on the Bitifinex exchange.

Losses in other currencies were greater in percentage terms. Ethereum tumbled 14.08% to $204.76 and Litecoin dropped 12.89% to $53.253, both on Bitifinex. XRP slumped 15.86% to $0.42452 on the Poloniex exchange.

The bearish mood may have been compounded by a report from cybersecurity intelligence Cipher Trace. The firm found that cryptocurrency thefts in the first three quarter of this year added up to $927 million.

The value of recorded crypto-thefts this year is 3.5 times higher than in the whole of 2017. Several heists in the third quarter ranged between $20 to $60 million for a total of $166 million, according to Cipher Trace.

“This data indicates a pattern of smaller robberies on a regular basis and sophisticated professional cyber thieves who carry out hacks at both the exchange and platform levels by capitalizing on exposed vulnerabilities, as well as by socially engineering employees who work at these companies,” the company said in the report.

Cipher Trace estimated that the value of cryptocurrency thefts could top $1 billion by the end of the year. The company also found that 97% of bitcoins related to crime went to unregulated cryptocurrency exchanges.

“The regulators are still a couple of years behind because there are only a few countries that have really applied strong anti-money laundering laws,” Dave Javens, CEO of Cipher Trace, told Reuters.

In a separate report, the Financial Stability Board (FSB), which monitors the global financial system, said that although digital tokens “do not pose a material risk to global financial stability at this time…vigilant monitoring is needed in light of the speed of market developments.”

The FSB said that if the use of crypto-assets continues to grow, risks including confidence effects, the exposure of financial institutions and others might increase. The digital currencies also “raise several broader policy issues, such as the need for consumer and investor protection; strong market integrity protocols; anti-money laundering and combating the financing of terrorism (AML/CFT) regulation and supervision.”

Despite the fall in the price of cryptocurrencies, 14 people in the blockchain industry, including Zhan Ketuan and Wu Jihan at Bitcoin mining company Bitmain, were added to the list of the wealthiest individuals in China, according to the Hurun China Rich List released on Wednesday.