Losses from crypto-related crime rose 79% from a year earlier, driven by a spike in theft and scams. Scamming was the greatest form of cryptocurrency-based crime in 2021, followed by theft — most of which occurred through hacking of cryptocurrency businesses. The firm says that DeFi is a big part of the story for both.
DeFi transaction volume grew 912% in 2021, according to Chainalysis stats. Impressive returns on decentralised tokens like shiba inu also spurred a feeding frenzy among DeFi tokens. But there are a lot of red flags when it comes to dealing in this nascent crypto ecosystem.
While there are third party firms that perform code audits and publicly designate which protocols are secure, many users still opt to work with risky platforms that bypass this step if they think they can get a large return.
Cryptocurrency theft rose 516% from 2020, to USD 3.2 billion worth of cryptocurrency. Of this total, 72% of stolen funds were taken from DeFi protocols. Losses from scams rose 82% to USD 7.8 billion worth of cryptocurrency. Over USD 2.8 billion of this total came from a relatively new but very popular type of scheme known as a ‘rug pull,’ in which developers build what appear to be legitimate cryptocurrency projects, before ultimately taking investors’ money and disappearing.
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