Cryptocurrency crime in 2021 hits all-time high in value – Chainalysis


NEW YORK (Reuters) – Cryptocurrency-linked crime surged to a file high final 12 months in phrases of value, with unlawful addresses receiving $14 billion in digital currencies, up 79% from $7.8 billion in 2020, in keeping with a weblog from blockchain evaluation agency Chainalysis launched on Thursday.

As of early 2022, Chainalysis stated illicit addresses already maintain over $10 billion value of cryptocurrencies, with nearly all of this held by wallets related to crypto theft.

Illicit addresses are outlined as wallets tied to legal actions reminiscent of ransomware, Ponzi schemes and scams.

That stated, illicit actions’ share of complete crypto transaction quantity remained low at simply 0.15% in 2021. Total transaction quantity surged to $15.8 trillion final 12 months, up greater than 550% from 2020 ranges.

Chainalysis, nevertheless, stated the 0.15% determine may nonetheless rise because the agency identifies extra addresses tied to unlawful transactions and incorporates that into the whole quantity.

In its final crypto crime report, Chainalysis had stated that 0.34% of 2020’s crypto transactions was related to criminal activity. That quantity has now been raised to 0.62%.

“Criminal abuse of cryptocurrency creates large impediments for continued adoption, heightens the chance of restrictions being imposed by governments, and worst of all victimizes harmless individuals all over the world,” stated Chainalysis.

Still, the underlying development prompt that apart from 2019 – an excessive outlier 12 months for crypto crime largely as a result of multibillion-greenback PlusToken Ponzi scheme – crime has grow to be a small a part of the cryptocurrency world.

The report additionally stated the rise in decentralized finance, or DeFi, which facilitates crypto-denominated lending exterior conventional banking, has been a giant issue in the rise in stolen funds and scams.

In 2020, lower than $162 million value of cryptocurrency was stolen from DeFi platforms, which was 31% of the 12 months’s complete quantity stolen. That represented a 335% enhance over the whole stolen from DeFi platforms in 2019.

In 2021, that determine rose one other 1,330% to $2.3 billion, Chainalysis stated.

DeFi transaction quantity surged 912% in 2021, and Chainalysis stated outsized positive factors on decentralized tokens like Shiba Inu have pushed buyers to invest on DeFi tokens.

“The enhance in DeFi-associated crime is an instance of how criminals usually exploit new applied sciences,” Kim Grauer, head of analysis at Chainalysis, stated in an electronic mail to Reuters.

“When DeFi began to develop this 12 months, we noticed giant will increase in DeFi protocols getting used to launder cash in addition to DeFi protocols being the precise victims of crimes reminiscent of hacking.”

(Reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Matthew Lewis)

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