The crime of cryptocurrency-based crimes reached a new high in 2021. Transactions involving illegal addresses received $14 billion last year, an increase from $7.8 million in 2020, Chainalysis, a blockchain data firm, said.
The firm stated that the percentage of fraudulent transactions fell to 0.15 percent as a result of the volume of cryptocurrency transactions. It posted the blog on its website. They also preview their 2022 Crypto Crime Report, which will be available in February.
Chainalysis tracked all cryptocurrencies and the total volume of transactions grew sixfold to $15.8 trillion by 2021. This is six times more than 2020.
These yearly trends indicate that crime is decreasing in the cryptocurrency ecosystem, with the exception of 2019, which was largely due the PlusToken Ponzi scheme. These trends also indicate that law enforcement’s ability is improving to combat cryptocurrency-based criminality.
Chainalysis stated in the blog that they have seen many examples of this in 2021. These include the CFTC (Commodity Futures Trading Commission), filing charges against investment scams, the Federal Bureau of Investigation’s investigation of the prolific REvil ransomware virus, and the US Treasury’s Office of Foreign Assets Control sanctioning Suex or Chatex, two Russian-based cryptocurrency services involved in money laundering.”
In terms of the growth in crypto crime, two categories stand out: stolen funds and scams. Decentralised finance (DeFi), which was a significant part of both, saw transaction volumes grow 10-fold by 2021.
DeFi is a financial technology that uses secure distributed ledgers, similar to the ones used in cryptocurrencies. This system removes banks and institutions’ control over money and financial products.
Scamming revenue grew 82 percent to $7.8 Billion worth of cryptocurrency stolen from victims by scammers in 2021.
Raj Kapoor (founder of the India Blockchain Alliance), stated that while DeFi is still a very exciting area in the cryptocurrency ecosystem it has not fully realised its potential. This allows for widespread fraudming and theft.
“Frankly, it’s relatively simple to create new DeFi tokens, and get them listed on the exchanges. Kapoor stated that scammers have exploited the greed and gullibility of investors to find loopholes.
The theft of cryptocurrency amounts to $3.2 billion. This is six times more than in 2020.