CipherTrace, a leading forensic blockchain company, released the Q3 2019 Anti-Money Laundering Cryptocurrency (AML) report. It stated the total volume of cryptocurrency-related fraud and theft resulted in losses worth $4.4 billion. Q3 2019 Lowest Quarterly Crypto Thefts and Scams in Two Years.
In the first nine months of the year, digital currency fraud losses increased to $4.4 billion, up more than 150% from $1.7 billion during 2018.
Financial analysts and regulators use blockchain technology from CipherTrace to track transfers in electronic resources.
CipherTrace conducted a first-ever detailed study of Know Your Customer (KYC) cryptocurrency exchange procedures and found that two-thirds of the top 120 exchanges lack strong KYC policies.
According to the Q3 report, total cryptocurrency crimes were significantly reduced compared to previous quarters.
Although it was the lowest quarter for thefts and scams in two years, there has been a massive spike in the number of crypto crimes in 2019, so far it is more than $4.4 billion.
CipherTrace cites progressing and sophisticated terrorist and criminal organizations are partly responsible for the cryptocurrency global regulatory clampdown.
Terrorists, other criminal gangs and their sponsors and followers are actively searching for new ways to raise and transfer funds without law enforcement detection or monitoring.
While authorities tend to stifle funds for the use of illegal cryptocurrencies, extremists use more advanced methods to secure funding for activities and threats and to launder money.
Most token exchanges have proactively scrapped their privacy coins in anticipation of the new FATF AML rules.
Thirty-two percent of exchanges, including those determined to have weak KYC, are still listed as privacy coins.
According to the report, terrorists, familiar with the forensic blockchain, are creating more effective methods of misrepresenting flows of cryptocurrency funds to fund attacks and operations.