Home News Bitcoin Strong AML Regulations Deterrence to Cryptocurrency Linked Crimes: Finds Study

Strong AML Regulations Deterrence to Cryptocurrency Linked Crimes: Finds Study

October 11, 2018 13:24
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In the first nine months of 2018, theft from exchanges of cryptocurrencies through sophisticated hacking techniques has hit nearly $927 million, showing an increase of about 250 per cent compared to the level seen in 2017, according to a report published by US-based cyber security firm, CipherTrace.

In 2017, total cryptocurrencies stolen from exchanges were at just $266 million, according to CipherTrace’s previous report. The report also revealed that the cryptocurrency theft had increased by 3.5 times in the first half of 2018, compared to the entire year in 2017 with the majority of theft amount contributed by the Coincheck and Bithumb hack.


Going by the trend, CipherTrace estimates that the total stolen amount of cryptocurrencies could go well past the $1 billion figure by the end of 2018. The report which looked at the criminal activity and money laundering showed that the theft of smaller amount in the range of $20-$60 million is growing steadily, totalling $173 million in the third quarter of 2018.

The report generated based on the quantitative analysis of 45 million transactions at top 20 cryptocurrency exchanges between the time period of January 2009 until September 20, 2018. It covers data from dark markets, extortion, malware, money laundering, ransomware and terrorist financing. Additionally, CipherTrace also reported that they are aware of $60 million in fraudulent transactions but were not reported.

Regulations Need of the Hour?

CipherTrace has also reported a unique finding in its report that relates to the Anti-money laundering laws. It stated that regulations are acting as a deterrence for criminal activities in the exchanges. It revealed that 97 per cent of bitcoin payments from criminals are channelled through exchanges with weak AML regulations.

The study revealed that nearly five per cent of all bitcoins that are sent to poorly regulated exchanges comes from criminal activity before the money is channelled into the global financial system. These exchanges have actually laundered close to 380,000 Bitcoins.

Dave Jevans, CEO, CipherTrace and co-chair of the Cryptocurrency Working Group at the APWG.org commented:

“This extensive research shows that regulation does have a direct correlation in hindering criminal activity, and we are on the right track to instil further trust in the crypto ecosystem. We will see the opportunities to launder cryptocurrencies greatly reduced in the coming 18 months as cryptocurrency AML regulations are rolled out globally.”

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