Crypto Crimes Hit Record High In 2021 Of $14 Billion: Chainalysis

Crypto crimes hit record highs in 2021 with a whopping $14 billion but still, crime is becoming a smaller part of the industry according to a report from Chainalysis so let’s read more today in our crypto latest news.

Crypto crimes hit records numbers in 2021 of a whopping $14 billion according to Chainalysis and their annual crypto crime report. This is an increase of 79% in value from the $7.8 billion figure from 2020 thanks to the surge in crypto prices last year. The activity represented 0.15% of the total $15.8 trillion in crypto transactions volume recorded over the course of the year which is the lowest percentage ever. For commission, the illicit share of the crypto transactions volume was 3.37% in 2019 and 0.69% in 2021 with the transaction volume soaring by 567% in 2020. the report noted:

“Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase was just 79%—nearly an order of magnitude lower than overall adoption—might be the biggest surprise of all… Crime is becoming a smaller and smaller part of the cryptocurrency ecosystem.”

Chainalysis also reported that the burgeoning sector of DEFI was responsible for a huge part of all crimes involving crypto in 2021. Defi is a common term for a suite of financial tools and apps that run on the blockchain and offer lending and borrowing of assets without intermediaries like banks. However, the promise of easy access to financial solutions is often marred by vulnerabilities in the codes and governance of the project. The reports also show that revenues from crypto scams in 2021 were up by 81% on the previous year to $7.8 billion. Out of this total, the rug pulls accounted for 37% of the crypto scam revenue:

“Many investors could likely have avoided losing funds to rug pulls if they’d stuck to DeFi projects that have undergone a code audit—or if [decentralized exchanges] required code audit before listing tokens.”

Crypto theft grew even more and had $3.2 billion worth of crypto stolen in 2021 which marked an increase of 516% since 2020. About $2.2 billion of the funds were stolen from Defi protocols. The report also summarized that DEFI is one of the most exciting areas of the wider crypto ecosystem which brings a lot of opportunities to crypto users and entrepreneurs. However, DEFI is also unlikely to realize its potential if the same decentralization allows for spamming and theft.