As digital assets gained popularity across the world, crypto criminals too reaped huge profits. The 2022 Crypto Crime report by Chainalysis shows a jump in scamming revenue.
Illicit transactions jumped nearly 80 percent to $14 billion, hitting an all-time high, according to the report. On the other hand, the overall transaction volume jumped by 567 percent, indicating that legitimate transaction outpaced criminal transactions.
However, most criminal activity was reported in the decentralised finance (DeFi) category, including DeFi projects or decentralised finance.
DeFi saw the greatest year-over-year growth in illicit activity. In 2020, about $162 million worth of cryptocurrency was stolen from DeFi platforms. This was a 335 percent increase in the overall stolen funds from DeFi platforms in 2019. In 2021, that figure jumped 1,330 percent, according to the Chainalysis report.
Scamming revenue rose to about $7.8 billion worth of cryptocurrency. Over $2.8 billion of this came from rug pulls. A rug pull is a new type of scam where developers build a legitimate-looking cryptocurrency project to create investment opportunities and then take investors’ money and disappear. About 90 percent of the total scam value lost to rug pulls in 2021 is attributed to Turkish crypto firm Thodex, that halted users’ ability to withdraw funds following which its CEO disappeared.
Significant growth in the usage of DeFi protocols for laundering illicit funds was also seen.
According to the…
