The crypto sector has lost over $1.2 billion in Q1 of this year according to new research conducted by blockchain analytics firm CipherTrace. The figure represents 70% of all the losses that were recorded in 2018 which saw losses amounting to approximately $1.7 billion.
However, the firm notes that the total could be much higher given that the losses represent thefts that are only visible. So far crypto exchanges have lost over $356 million, and then there is the $850 million that is alleged to have been lost by Bitfinex crypto exchange according to the office of the Attorney General of New York.
It’s important to note that the crypto exchange has claimed that various authorities have frozen the funds at a payments company and the platform is working on retrieving them.
In its “Q1 2019 Cryptocurrency Anti-Money Laundering Report,” CipherTrace cites lack of precise regulation within the crypto sector as the main reason behind the enormous losses. However, it adds that clarity is expected soon.
“A tsunami of tough new global anti-money laundering (AML) and counter-terror financing (CTF) regulations will roll over the crypto landscape in the coming year.”
The analytics firm also highlighted what it considers as a huge gap when it comes to the current regulatory environment especially cross-border cryptocurrency payments.
“An analysis of 164 million BTC transactions revealed that cross-border payments from U.S. exchanges to offshore exchanges increased from 45% from the twelve months ending Q1 2017 to 66% in the twelve months ending Q1 2019.”
The final part of the report touches on how scammers have been adopting new techniques such as insider misappropriations and kidnappings to ensure they steal crypto from both individuals and companies in Q1.
What’s your take on the crypto sector losing over $1.2 billion in the first quarter of the year? Share your thoughts in the comment section below.