Value in Losses Linked to Crypto Crimes Reached $1.8B in First 10 Months of 2020
Crimes related to cryptocurrency have been occurring throughout the year 2020. These crimes occurred in the form of frauds, thefts, hacks, and resulted in huge losses. Value in losses associated with cryptocurrency crimes has risen up in the first ten months of the present year. According to the latest figures provided by crypto forensic company CipherTrace, cryptocurrency scammers have stolen an amount of $1.8 billion so far this year. The decentralized finance (DeFi) sector counts for the majority of these crimes.
However, comparatively, the value of losses that occurred in the current year is less than that of the year 2019. A total of $4.52 billion was netted by cryptocurrency scammers and fraudsters via illicit activities in 2019. This value was up by 160% from the value of losses ($1.74 billion) witnessed in 2018. As there are only less than two months left before the present year ends, therefore, there is unlikely a chance that 2020 can record the highest value of losses. However, it could be on the second number, as CipherTrace’s newly released data suggests.
The decentralized finance (DeFi) space counts for a major portion of these stolen funds. Cryptocurrency-related hacks that occurred in the DeFi sector have resulted in the loss of $98 million of funds. This represents 21% of the entire digital currency theft volumes in the current year.
Moreover, the report noted that criminals used top decentralized exchanges for laundering their stolen funds. For instance, the major cryptocurrency exchange KuCoin’s hack resulted in the loss of approximately $281 million in funds worth of cryptocurrencies. Hackers used the top-ranked decentralized exchange Uniswap for laundering this massive amount of crypto funds.
The reason behind this is the exponential growth that various decentralized finance protocols have seen throughout this year. As per data from DeFi Pulse, the total value locked across different decentralized finance protocols has surged high to $13.42 billion. This DeFi boom attracted cryptocurrency scammers.
Furthermore, the CipherTrace report stated that Ponzi schemes and various investment scams accounted for a major portion of these stolen funds. Fake token sales, phishing scams, and fake digital currency mixers are some of the other prominent ways that crypto criminals adopted for defrauding funds.
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