Why Cryptocurrency Crime At All Time High

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Why Cryptocurrency Crime At All Time High

Cryptocurrency Crime Jumps To All Time High

Crime in the cryptocurrency segment has increased to the greatest level with respect to value. It has been about $14 billion in 2021, an increase by 79 percent compared to 2020 when the theft was $7.8 billion with illegal addresses.

According to Chainalysis, cryptocurrencies worth $10 billion are still held by illicit addresses and mostly held by wallets linked to crypto theft such as ransomware, scams and Ponzi schemes.

However, the transaction volume related to illicit activities was low to 0.15 percent in 2021. The total cryptocurrency transaction volume in the year was $15.8 trillion, which was a jump of over 550 percent compared to 2020.

Chainalysis added that the theft figure could move up as more such illicit addresses have been identified. An earlier report published revealed that 0.34 percent of crypto transactions in 2020 were linked to illegal activities. Lately, the number has jumped to 0.62 percent.

It is learned that DeFi or decentralized finance is the primary factor in increased crypto thefts. The segment facilitates the lending of cryptocurrencies outside traditional banking. Nearly $162 million worth of Cryptocurrencies were stolen in 2020 from the DeFi platforms. It accounted for 31 percent of the total stolen amount in the year. It was an increase of 335 percent from such platforms in 2019.

DeFi-related crime signals technology is being exploited to materialize crime. DeFi started growing this year and lately several protocols have been used to launder money.

Cryptocurrency is about a decade old. The sector is still in the evaluation phase. It is too early to understand the future cryptos. Lawmakers and regulators are working on legal frameworks to create a protective environment for investors.

Bitcoin is the first cryptocurrency and was launched in 2009. Today, thousands of cryptocurrencies are available. The segment is completely decentralized and not under the direct control of any government, bank or agency.

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