In 2021, crypto criminals made a killing, as illicit crypto transactions hit $14 billion, a 79% jump from the $7.8 billion recorded in 2020, according to a report by US-based blockchain analytics company, Chainalysis.
The growth in illicit crypto transactions is attributed to a 567% jump in overall transaction volume in 2021. Given that overall crypto transactions grew to $15.8 trillion in 2021, it is not surprising that cybercriminals are increasingly using crypto. Despite the increase in the total volume of illicit transactions, illicit transactions represented just 0.15% of the total cryptocurrency transaction volume in 2021—its lowest ever. What this means is that legitimate crypto transactions far outstrip illegal transactions.
Scams and theft ranked as the highest source of crypto crime and decentralised finance (DeFi) contributed most part of the funds stolen, the report shows. Scamming revenue jumped 82% to $7.8 billion worth of cryptocurrency stolen from victims. Over $2.8 billion of this total were stolen through a new type of scam called “rug pull”. A rug pull is a type of scam where developers disappear with the money invested in crypto projects or exchanges that appear legitimate.
Cryptocurrency theft also jumped 516% to roughly $3.2 billion worth of cryptocurrency stolen in 2021. With 72% or 2.2 billion of those funds stolen from DeFi protocols.
DeFi is a term for a financial ecosystem of tools and applications…
