Over USD 14 bln worth of crypto stolen in 2021

Thursday 6 January 2022 13:27 CET | News

Scammers took home a record USD 14 billion in cryptocurrency in 2021, thanks in large part to the rise of DeFi platforms, according to a Chainalysis study.

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.

One problem with DeFi, according to Kim Grauer, Chainalysis’ head of research, is that many of the new protocols being launched have code vulnerabilities that hackers can exploit. 21% of all hacks in 2021 took advantage of these code exploits.

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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Keywords: online fraud, money laundering, DeFi, cryptocurrency, financial crime
Categories: Fraud & Financial Crime
Companies: Chainalysis
Countries: World
This article is part of category

Fraud & Financial Crime


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