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Losses from cryptocurrency thefts, hacks, and frauds soared to
nearly $1.4 billion from the beginning of the year until the end
of May, a report from CipherTrace showed.
The proportion traced to coronavirus fraud involving
cryptocurrencies for the first five months of the year was
minimal, CipherTrace said, but it did not give a specific
figure.
This year's crypto crime is on track to be the second largest on
record after last year's $4.5 billion in losses.
"Consumers, investors, and users continue to adopt
cryptocurrency at a massive rate and it is by far the
fastest-growing payment system on the planet," Dave Jevans,
CipherTrace chief executive officer, told Reuters.
"At one trillion dollars in annual payments, cryptocurrency
payments have grown from zero to 7% in 10 years, making this
volume of funds attractive to bad actors," he added.
Coronavirus-inspired fraud generally took place by luring
victims off legitimate platforms into chat rooms where payment
in bitcoin can be requested, CipherTrace said in the report.
COVID-19 fraud has also taken the form of impersonating
legitimate entities such as The Red Cross to extract personal
information and payment in cryptocurrencies, applications that
claim to support victims but are actually spying on users, as
well as the sale of bogus personal protective equipment,
supposed treatments, and testing kits.
Though the majority of COVID-19-related products advertised on
darknet markets did not result in many sales, these markets sold
coronavirus phishing kits quite successfully, CipherTrace said.
The largest contributor to crypto losses this year was the $1
billion Ponzi scheme by Wotoken in China, the extent of which
came out last month in a criminal trial, according to the
CipherTrace report.
The Wotoken scheme offered investors the chance to generate
returns for users by employing algorithmic trading bots,
offering referral commissions to affiliates, news reports said.
However, the advertised proprietary trading software did not
exist.
The CipherTrace report also released findings showing that for
the third year in row, Finnish exchanges in 2019 received the
highest number of bitcoins that were supposed to have come from
criminal sources. Some 12.01% of tainted bitcoins went through
their trading platforms last year.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alden Bentley
and David Gregorio)
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