In a recent report published by CipherTrace, an organization operating in the domain of cybersecurity, it has been estimated that the total amount of cryptocurrencies theft in the first quarter of the calendar year 2019 is around humongous $1.2 billion. This staggering figure indicates that all the measures taken by the various regulatory agencies as well as crypto exchanges are not yielding desired results. That’s not to say that the crypto-security apparatus has entirely collapsed, but the huge amount of losses to various forgeries and acts of online thefts are much more in number than all these security mechanisms can purportedly handle. To put the things in perspective, the theft amount of $1.2 billion is around 70% of the total money that crypto investors lost to hackers in the year 2018.
Fine Prints of Report
Dissecting the details, the report claimed that $336 million were lost in the form of various scams that broke cryptocurrency exchanges while misappropriation of the funds or fraud resulted in the loss of $851 million. This number includes the loss of $134 million that QuadrigaCX (a Canadian cryptocurrency exchange) suffered due to its inability to access the funds due to the sudden demise of its founder who was the only person having the password to access the stored money. The chief executive officer of the CipherTrace, Dave Jevans blamed these heavy losses in the cryptocurrency domain on the loosely-defined regulations and absence of a standardized framework for regulating the digital coins. He also emphasized that along with other reasons, the greed and mismanagement of the funds by the management of the crypto organization and exchanges have worsened the state of affairs. The report also indicts the absence of a regulatory framework for money laundering in crypto domain. It says while the regulations in the US are quite up to mark, other countries including many European nations are still to regulate crypto and come up with the clear cut network for protecting the interest of the investors.
The quarterly report also emphasized the gap between regulations that exist in the US and other countries with regard to cross-border payments. While banks and financial institutions in the US work under the purview of the regulatory framework, the same is not true for many countries where these cross border payments are being made to. The trend of cross-border payments is catching up fast with the general public. Analysis of the data related to Bitcoin transactions worth 164 million in the last two years shows that the offshore transactions have registered a gain of around 46%. This stellar growth has further necessitated a standardized protocol or regulatory framework to deal effectively against any kind of fraud or misappropriation of funds in cross-border payments. This will help to provide overall secure transacting networks for digital currencies while transacting overseas.