CipherTrace: the amount of cryptocurrencies stolen from exchanges and scammed from investors surged 400%+ in 2018 to $1.7B
NEW YORK (Reuters) - Cryptocurrencies stolen from exchanges and scammed from investors surged more than 400 percent in 2018 to around $1.7 billion …
Context & Ripple Effects
This closes the loop on a number CipherTrace had been tracking all year: its mid-2018 estimate that exchange theft had already tripled to $761M against all of 2017 and might reach $1.5B by December. The full-year figure of roughly $1.7B means the actual total overshot even that projection, with investor scams — not just exchange hacks — driving the second half.
The report lands at the start of 2019, when the market's crash had already thinned retail participation, making the scale of losses a fresh argument for anyone pressing exchanges and regulators on custody standards. CipherTrace's quarterly series continued through the year, with $356M more taken from exchanges in Q1 2019 alone.
First-order effects
- Exchanges and defrauded investors absorbed the direct losses, with the full-year total exceeding CipherTrace's own mid-year $1.5B ceiling — meaning the second half of 2018 was worse than the record first half.
Second-order effects
- Exchanges face rising security and insurance costs just as trading revenue shrinks in the post-crash market, while compliance-focused firms like CipherTrace gain a growing customer base for blockchain forensics.
Third-order effects
- The pattern holds across the decade: later CipherTrace data shows theft migrating to new venues such as DeFi, and TRM's 2024 finding that five large hacks accounted for most of a $1.38B half-year total suggests losses persist but concentrate in fewer, bigger attacks rather than disappearing.
The trend: Cryptocurrency theft has become a structural, recurring cost of the industry, with each new venue — exchanges, then DeFi — resetting the attack surface faster than defenses close it.