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Exit Scams Swindled $3.1 Billion From Crypto Investors in 2019: Report

Originally published on: CoinDesk
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August 12, 2019


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Cryptocurrency crime made good money last quarter, although slightly less than in the first quarter of 2019.

According to an initial release of CipherTrace’s Q2 2019 Cryptocurrency Anti-Money Laundering Report, aggregate crypto losses reached $4.3 billion this year. Hacking thefts amounted to $125 million, adding to a 2019 total of $227 million. Excluding the QuadrigaCX hacking of $195 million, hackers stole $161 million in Q1.

Given that CipherTrace’s price estimations are set at the time of initial reporting, current valuations would be much higher.

CipherTrace further claims 2019 may be the “Year of the Exit Scam,” with $3.1 billion stolen through exits and another $874 million in misappropriated funds. These numbers, CipherTrace notes, are only preliminary and that there are numerous other allegations under investigation. 

An unconfirmed exit scam by South Korean exchange and pyramid scheme “Plus Token” is included in the estimates. Investors are suspected to have lost as much as $2.9 billion. The details around the exit scam have yet to be established.

In total, investors, users, and exchanges have lost almost $4.3 billion from illicit activity.

CipherTrace notes that illicit funds will soon come under more intense scrutiny following the Financial Action Task Force’s (FATF) recent Travel Rule. The rules mandate personal information for both the sender and receiver of funds for transfers over $1,000.

Image via CoinDesk archives

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