There were also a range of other developers including Pieter Wuille and Peter Todd who contributed to the development of Bitcoin Core - the first client on the Bitcoin network. On 21 November 2017, Tether announced that it had been hacked, losing $31 million in USDT from its core treasury wallet. In June 2018, South Korean exchange Coinrail was hacked, losing over $37M worth of cryptos. In 2019, more than a billion dollars worth of cryptoassets was reported stolen. A 2020 EU report found that users had lost crypto-assets worth hundreds of millions of US dollars in security breaches at exchanges and storage providers. Between 2011 and www.youtube.com 2019, reported breaches ranged from four to twelve a year. A quarter of gift card recipients still have not spent gift cards a year after receiving them, according to a Consumer Reports survey, and a majority of people say they end up spending more than the value of the card once they get to the store.
According to a 2020 report produced by the United States Attorney General's Cyber-Digital Task Force, the following three categories make up the majority of illicit cryptocurrency uses: "(1) financial transactions associated with the commission of crimes; (2) money laundering and the shielding of legitimate activity from tax, reporting, or other legal requirements; or (3) crimes, such as theft, directly implicating the cryptocurrency marketplace itself." The report concludes that "for cryptocurrency to realize its truly transformative potential, it is imperative that these risks be addressed" and that "the government has legal and regulatory tools available at its disposal to confront the threats posed by cryptocurrency's illicit uses". Rather than laundering money through an intricate net of financial actors and offshore bank accounts, laundering money through altcoins can be achieved through anonymous transactions. Systems of anonymity that most cryptocurrencies offer can also serve as a simpler means to launder money. Regulatory Authority means any foreign, domestic, state, federal, cantonal, municipal or local governmental, executive, legislative, judicial, administrative, supervisory or regulatory authority, agency, quasi-governmental authority, court, commission, government organisation, self-regulatory organisation having regulatory authority, tribunal, arbitration tribunal or panel or supra-national organisation, or any division or instrumentality thereof, including any tax authority.
Properties of cryptocurrencies gave them popularity in applications such as a safe haven in banking crises and means of payment, which also led to the cryptocurrency use in controversial settings in the form of online black markets, such as Silk Road. The data suggests that rather than managing numerous illicit havens, cybercriminals make use of a small group of purpose built centralized exchanges for sending and receiving illicit cryptocurrency. The original Silk Road was shut down in October 2013 and there have been two more versions in use since then. According to Bloomberg and the New York Times, Federation Tower, a two skyscraper complex in the heart of Moscow City, is home to many cryptocurrency businesses under suspicion of facilitating extensive money laundering, including accepting illicit cryptocurrency funds obtained through scams, darknet markets, and ransomware. On 19 December 2017, Yapian, the owner of South Korean exchange Youbit, filed for bankruptcy after suffering two hacks that year. On 7 December 2017, Slovenian cryptocurrency exchange Nicehash reported that hackers had stolen over $70M using a hijacked company computer.
According to the UK 2020 national risk assessment-a comprehensive assessment of money laundering and terrorist financing risk in the UK-the risk of using cryptoassets such as Bitcoin for money laundering and terrorism financing is assessed as "medium" (from "low" in the previous 2017 report). Since charting taxable income is based upon what a recipient reports to the revenue service, it becomes extremely difficult to account for transactions made using existing cryptocurrencies, a mode of exchange that is complex and difficult to track. Blockchain analysis company Chainalysis concluded that illicit activities like cybercrime, money laundering and terrorism financing made up only 0.15% of all crypto transactions conducted in 2021, representing a total of $14 billion. This added up to approximately 7% of all Bitcoins in existence, worth a total of $473 million. TD Ameritrade provides each client with $149.5 million worth of protection for securities and $2 million of protection for cash through supplemental coverage provided by London insurers. In the United States and Canada, state and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating "Bitcoin scams" and ICOs in 40 jurisdictions.