The largest scam is Wotoken of Chinese in the first five months of 2020 with $1.09 billion

Today, the blockchain analytics firm CipherTrace said fraudsters, malicious hackers and thieves have amassed $1.36 billion in ill-gotten crypto through the first five months of 2020.

According to “Spring 2020 Cryptocurrency Crime and Anti-Money Laundering Report” on June 1, that hefty haul puts 2020 on track to become the second-costliest year in the history of crypto, behind 2019’s record $4.5 billion, but likely ahead of 2018’s $1.7 billion, the firm estimates.

Wotoken’s event by 2018 in Bejing, China

This year’s running total largely comes from a single fraud: Wotoken. The massive Chinese multi-level-marketing scheme stole $1.09 billion in 2018 and 2019, but only came to light last month. CipherTrace said Wotoken’s funds – 46,000 BTC, 2.04 million ETH, 292,000 LTC, 56,000 BCH and 684,000 EOS– are still on the move.

In the first five months of 2020, crypto thefts, hacks, and frauds totaled $1.36 billion, suggesting 2020 could see the second-highest value in crypto crimes ever recorded. In a trend that continues from last year, fraud and misappropriation still make up most of the year’s stolen crypto compared to hacks and thefts. Of the $1.36 billion stolen, fraud and misappropriation account for 98% of the total value—nearly $1.3 billion.

LocalBitcoins Leads as Go-To for Direct Criminal Funds for Third Year in A Row

For the third year in a row, Finnish exchanges ranked #1 in highest percentage of criminal BTC received , with 12.01% of all BTC funds received coming directly from criminal sources. Finland-based LocalBitcoins, one of the largest peer-to-peer marketplaces, received over 99% of these criminal funds. In August 2019, Kunal Kalra, aka Shecklemaayne,pled guilty to US federal criminal charges for owning and operating an unlicensed MSB, exchanging nearly $25 million through his LocalBitcoins account and Bitcoin ATM.

Russian exchanges ranked number two in 2019, with 5.23% of all funds received coming directly from criminal sources, such as dark markets, ransomware, hacks, and other illicit activity, according to CipherTrace.

U.K. exchanges followed next, with 0.69% share, while Germany, Japan, and U.S.-based exchanges accounted for less than 0.1% for receiving criminal funds, per CipherTrace.

In the past, lack of regulatory clarity in the United Kingdom has made the country’s exchanges a hotspot for criminals to quickly and easily cash out. With the implementation of AMLD5 and Britain’s Financial Conduct Authority (FCA) announcing in January 2020 that they will now monitor AML/CTF for crypto asset activity, only time will tell how much of an effect these moves will have on the amount of criminal BTC being funneled into UK exchanges.

“The largest contributor to this high number is a billion-dollar Ponzi scheme by Wotoken in China,” said CipherTrace. “The scam promised investors unrealistic returns using a non-existent algorithmic trading software. Ultimately, one Wotoken operator (with ties to the infamous PlusToken Ponzi scheme) stole an estimated $1 billion in crypto from over 715,000 victims.”

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