In 2019, the total volume of cryptocurrency-related fraud and theft resulted in losses worth $4.4 billion, according to CipherTrace’s report for the third quarter of 2019.

In its “Cryptocurrency Anti-Money Laundering Report, 2019 Q3,” security research firm CipherTrace delved into the 120 most popular cryptocurrency exchanges’ compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements and analyzed patterns in crypto-related crimes.

Decline in crypto crime volume and weak KYC standards

Per the report, Q3 2019 saw a notable reduction in total cryptocurrency crimes as compared with previous quarters, and thus the lowest quarterly thefts and scams in two years:

“This quarter, cybercriminals stole $6.5 million from cryptocurrency exchanges, while insiders bilked cryptocurrency users out of $9 million in exit scams and Ponzi schemes. This total of $15.5 million represents the smallest number of cryptocurrency crimes of any quarter in the past several years.”

However, total losses from crypto theft on the year have sky-rocketed since 2018, as crypto thieves go after larger sums. Crypto thefts accounted for $4.4 billion in losses, up from $1.7 billion the year previously.

Two particular scams, the PlusToken scheme ($2.9 billion) and the QuadrigaCX crypto exchange fiasco ($195 million) accounted for the vast majority of losses.

Out of the 120 analyzed crypto exchanges, 35% have strong KYC standards, 41% have “porous” standards and 24% have weak KYC standards. 32% of the top-120 exchanges trade privacy coins.

Recent high-profile crypto fraud cases

Cyber criminals are developing new and more sophisticated methods to obfuscate the flow of funds. On Nov. 26, Slovakian software security firm Eset discovered that cybercriminals behind the Stantinko botnet have been distributing a Monero (XMR) cryptocurrency mining module via Youtube. This crypto-stealing malware has reportedly infected around 500,000 devices.

Earlier today, major South Korean cryptocurrency exchange Upbit — which is run by a subsidiary of Korean tech giant Kakao — notified users of the theft of 342,000 Ether (ETH) (over $50 million at press time) from its hot wallet. The exchange pledged to protect user assets, stating that the lost funds will be covered by corporate assets.

Earlier this month, Gregg Bennett, a SIM-swap hack victim and angel investor, sued cryptocurrency exchange Bittrex over allegedly allowing the theft of nearly $1 million in Bitcoin (BTC).