KPMG Reports That $9.8M In Crypto Was Stolen Since 2017

Owning cryptocurrency is something that could definitely help you see profits in the long run. However, a lot of institutional investors still see this as a risk, according to new KPMG reports issued on March 2 and shared with Bloomberg.

As we can see from the cryptonews now, KPMG listed lax security and poorly written code among the things which were responsible for most of the thefts. As institutional investors adopt Bitcoin (BTC) and Ethereum (ETH) to their portfolios, securing the tokens becomes a critical issue, KPMG reports.

The reports are now in the cryptocurrency regulation news and the need to satisfy this market demand resulted in several companies offering custody services, both from traditional companies such as Fidelity and Intercontinental Exchange (ICE) as well as major crypto players such as Coinbase and Gemini.

The co-loader of KPMG’s crypto asset services, Sal Ternullo, who is also one of the report’s authors, explained that the lack of proper custody is a major concern for institutional investors.

“Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks and bonds are,” Ternullo said.

This double edged sword of cryptocurrency decentralization is the ease with which it can be stolen and then used again. The ownership of cryptocurrency, as KPMG reports, is defined by simply knowing the private key with no ties to identities or government records.

Even though not all of the crypto thefts compromised actual private keys, securing funds has been challenging for existing custodians such as exchanges. Even twelve of them have been hacked in 2019, including the names of Binance, for a total of $300 million stolen. KPMG reports that dedicated custodians are positioned to benefit massively from the growth of the crypto ecosystem:

“As crypto-assets proliferate, custodians have a tremendous opportunity to profit — both by earning management fees for delivering straightforward custodian services, and also by offering adjacent services only possible in the emerging crypto ecosystem.”

Finally, the report mentioned the need to improve compliance methods for storing cryptocurrencies for customers. KPMG believes that the institutions should improve their methodologies in light of the “unique considerations for crypto-assets and related data-management challenges,” as the report states.