Crypto Scammers’ Stolen Money Reached a Record High in 2021

According to new data from blockchain analysis company Chainalysis, crypto scammers took a record $14 billion in cryptocurrency in 2021. This was mainly due to the rise of decentralized finance (DeFi) platforms.

Driven by the surge in theft and fraud, crime losses related to encryption have increased by 79% from a year ago.

Fraud is the largest form of crime based on cryptocurrency in 2021, followed by theft. Most of these crimes occurred through hacking cryptocurrency businesses. The company said that DeFi is an important part of the story of both parties. This is actually another warning for those involved in the emerging field of the encryption industry.

DeFi is a fast-growing crypto market sector that aims to eliminate intermediaries such as banks from traditional financial transactions.

With DeFi, programmable code segments, called smart contracts, replace banks and lawyers. The contract is written on a public blockchain, such as Ethereum or Solana, executed when certain conditions are met without a central intermediary.

According to Chainalysis’s statistics, DeFi transaction volume increased by 912% in 2021. The impressive returns of decentralized tokens like Shiba Inu have also ignited the DeFi token frenzy.

But when dealing with this nascent crypto ecosystem, there are many red flags.

One problem with DeFi is that many newly introduced protocols have code vulnerabilities that hackers can exploit. Hackers have taken advantage of these code vulnerabilities in 21% of all attacks in 2021.

Crypto scammers and cryptocurrency theft has increased by 516% from 2020, reaching $3.2 billion worth of cryptocurrency. Among them, 72% of stolen funds came from DeFi agreements.

As a result, losses caused by fraud increased by 82%, reaching $7.8 billion worth of cryptocurrency.