Hacks, hacking and fraud still haunt the cryptocurrency market.

In the year 2020, which has already been 5 months, scammers managed to win $1.36 billion in cryptocurrencies.

CipherTrace published its 2020 Hacking and Fraud Findings in its June Anti-Money Laundering and Crime Report.

According to CipherTrace, this huge number puts 2020 on track to become the second most expensive year in crypto history in terms of hacking and fraud, behind the record set in 2019 of $4.5 billion, while in 2018 the figure was $1.7 billion.

This year’s total comes largely from one scam:

“Wotoken” that we previously touched upon in Arab Bitcoin:

A new scam managed to steal a billion dollars in Bitcoin and cryptocurrencies

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The “Wotoken” fraud scheme, which is based on a multi-level marketing scheme, managed to raise $1.09 billion in 2018 and 2019, but only appeared in its fraudulent form last month.

CipherTrace reported that the funds collected from Wotoken amounted to 46,000 BTC, 2.04 million ETH, 292,000 Litecoin, 56,000 BCH and 684,000 EOS and these coins are still in motion.

stated John Jeffries, chief financial analyst at CipherTrace, said about this fraudulent scheme:

It was a classic pyramid scheme, claiming to have a “magic algorithm”, which grew in popularity, with 715,000 engaging users.

Jeffreys added that the scheme collapsed from the weight.

The perpetrators behind this fraudulent scheme are being prosecuted in China right Now.

The Wotoken scheme confirms that the scams are still going on.

But despite the high number of scams, the cryptocurrency market is maturing and growing, with trading platforms constantly enhancing their security systems.

Jeffries noted that the fraud highlights the need for closer regulation of crypto businesses, adding in the statement:

Read:US Treasury Secretary: Bitcoin consumes electricity and is used in illegal payments

If Wotoken was required to really reveal the way the scheme works, it would have failed faster.

Of crypto licensing systems, Jeffries said:

It is not just about protection against terrorist financing or protection against money laundering.

It must also consider how to protect uninformed consumers.

Mature criminals:

Criminals are constantly improving their tactics.

A week ago wallets from the darknet were seen sending crypto to exchanges, CipherTrace found that more than 30% of transfers took a temporary and experimental step before it, while less than 10% of transfers went directly.

CipherTrace reports that these additional steps, although traceable, help hide cryptocurrency sources and increase the risk of the platform inadvertently laundering criminal money.

Only 0.17% of illegitimate cryptocurrencies accessed exchanges directly in 2019.

Remittances from US Bitcoin ATMs to exchanges continue to grow at an exponential rate.

Last year, exchanges received 8% of cryptocurrencies.

CipherTrace said that there are high-risk trading platforms that aid money laundering and have a bad reputation.

Global Transfers:

The crypto industry is global and so are its trading platforms, with 74% of transactions taking place across borders in 2019.

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This could become a particular problem as the June 2020 deadline set by the Global Financial Action Task Force (FATF) for crypto companies approaches and begins collecting trading platform user information.

He told Jefferies that the technology created to help trading platforms comply with the FATF’s so-called “travel rule” is ready for implementation.

However, the states tasked with implementing the rule are not.

Jeffries added that some jurisdictions are already ready, especially with full regulations in place. He added in the statement:

It is important that cryptocurrencies maintain their value through the ability to transfer international funds.

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