Crypto-Linked Crime Climbed 78% in 2021 Compared to Previous Year

The value of crime linked to cryptocurrencies nearly doubled last year to $14 billion, rising 79% from $7.8 billion in 2020.

Roughly $10 billion worth of cryptocurrencies are currently being held by illicit addresses, as of the first week of the new year, according to the latest report from Chainalysis. The report defines illicit addresses as wallets associated with criminal activities such as crypto theft in the form of scams, ransomware, and Ponzi schemes.

Despite the record figure, illicit activities only constituted a mere 0.15% of the $15.8 trillion in total cryptocurrency transaction volume last year, a 550% increase over the year prior. However, the figures could still rise, as the analytics firm incorporates any further addresses tied to illegal transactions into the overall amount. 

For instance, Chainalysis reported that 0.34% of crypto transactions in 2020 had been associated with illegal activity, which subsequently rose to 0.62%. But apart from an extreme outlier, in the form of the multibillion-dollar PlusToken Ponzi scheme in 2019, the proportion of crypto transactions associated with crime is showing a diminishing trend.

Debasing DeFi

As transaction volumes in decentralized finance surged 912% last year, the report highlighted it as a new arena in which illicit crime has increasingly flourished. While the $162 million worth of crypto stolen from DeFi platforms in 2020 accounted for 31% of the total stolen that year, that figure was a 335% increase from 2019. Last year, that figure rose a staggering 1,330% to $2.3 billion, according to Chainalysis.

“The increase in DeFi-related crime is an example of how criminals often exploit new technologies,” Chainalysis head of research Kim Grauer told Reuters. “When DeFi started to grow this year, we saw large increases in DeFi protocols being used to launder money, as well as DeFi protocols being the actual victims of crimes such as hacking.”

What do you think about this subject? Write to us and tell us!

Disclaimer


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Source: https://beincrypto.com/crypto-linked-crime-climbed-78-in-2021-compared-to-previous-year/