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Over $500 Million Stolen from Crypto Wallets. What We Can Do in a Situation Where We Are Victims of Fraud?

Jul 31, 2018

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Recognized as a global leader in RegTech for blockchain, Coinfirm serves as a foundation for the safe adoption and use of blockchain. The Coinfirm AML/CTF Platform uses proprietary algorithms and big data analysis to provide structured, actionable data that solves compliance and transaction risk issues in blockchain and cryptocurrencies. The blockchain agnostic platform is currently used by anyone ranging from major financial institutions to exchanges. In addition, Coinfirm develops dedicated blockchain solutions such as the data provenance platform Trudatum that was recently integrated by the largest bank in CE.

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Coinfirm has developed investigative analytics solutions and services for better market protection, as scammers activity is growing.

In the first quarter of 2018 the estimated loss of stolen crypto assets reached 542 million USD, according to calculations of US Federal Trade Comission. [1] The estimated value of loss from hacks and scams for period 2011-2018 amounted to over 2 billion USD. The number of cryptocurrency thefts resulting from fraudulent activities are increasing from year to year along with the growth of the cryptocurrency market.

One of the most recent hacks involved one of the largest Japanese cryptocurrency exchanges. In January 2018, 400 million USD worth of tokens were stolen from Coincheck. According to the Coincheck COO the stolen funds were kept on a “Hot wallet” instead of an offline “Cold wallet”. [2] In February another exchange, BitGrail reported a cryptocurrency theft valued around 170 million USD. [3] And this is just the beginning of the year.

The majority of fraud cases widely reported in the media refer to either big cryptocurrency entities or to cases in which huge amounts of money were stolen. On the other hand, in most of scams, hacks and frauds mainly individuals are affected, and they involve much smaller amounts of money. Furthermore, most of these cases go unreported let alone solved.

Are we helpless in a situation where we are victims of such fraud?

At Coinfirm we've created technological solutions to identify where the stolen funds have been transferred to. It is possible to track the flow of funds and activities on addresses where the funds are currently stored. With a detailed investigation, it is possible to trace all transactions and addresses, and, in some cases, it may be possible to recover stolen funds. In the process of tracking stolen funds we’re also able to identify various addresses that were involved in that process and inform all users of our platform about the potential risks associated with dealing with them. With advanced analytical tools, it is possible to analyze huge amounts of data and obtain the results in real time.

"Coinfirm as a project was created with the vision that blockchain is the most transparent system ever created. Together with anti-money laundering and anti-fraud tools, it has a chance to become a secure and transparent system at a level that is unattainable in the traditional financial system. Coinfirm as a RegTech Leader created such analytical tools. With a team of fraud, data science and IT experts we provide investigative analytic solutions and services"

Paweł Aleksander, Co-founder and CIO at Coinfirm.

About Coinfirm
A global blockchain regtech leader, Coinfirm serves as a foundation for the safe adoption and use of blockchain. With user including major cryptocurrencies like Dash, ICO’s, and banks, the Coinfirm AML/KYC Platform uses proprietary algorithms and big data analysis to provide actionable data and reports that increases efficiency, reduces costs and streamlines compliance to near automation. In addition, Coinfirm recently released their AMLT Token to allow for market participants to help rate good and bad actors in the economy, increasing safety, security, and democratizing the financial system.