Tech

Cryptocurrency crimes grossed $ 14 billion in 2021, a record

Cryptocurrency-related crimes grossed hackers and crooks around $ 14 billion in 2021. However, the share of transactions related to illicit activity continues to decline year on year as the market continues to explode. Last year, criminal activities only represented 0.15% of trade.

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According to a new report by Chainalysis, the famous blockchain analytics firm, cryptocurrency-related criminal activity has reported around $ 14 billion in 2021. It’s a “New historic peak”, explains the specialist.

In 2020, crimes related to digital currencies, such as Bitcoin or Ether, have indeed generated only 7.8 billion dollars. To explain this sharp increase, Chainalysis points the finger the rise of decentralized finance (DeFi), this implementation of blockchain technology which eliminates the need for banks.

On the same topic: Bitcoin, Ether and most cryptocurrencies collapse again

The share of criminal activity linked to cryptocurrencies is declining

By defrauding DeFi users or hacking industry protocols, criminals have generated huge profits. “Scam-related revenue increased 82% in 2021 to $ 7.8 billion in cryptocurrency stolen from victims”, details the report. Along with scams, digital currency theft has also increased (+ 516% in one year). Chainalysis believes that $ 3.2 billion in cryptocurrency were stolen in 2021, up from just under $ 162 million in 2020.

Among the biggest hacks of the last year was the BadgerDAO protocol hack in December. By exploiting a loophole, a hacker managed to steal $ 120 million in Bitcoin and Ether. A few months earlier, a hacker stole $ 600 million in cryptocurrency from the Poly Network protocol. Finally, the report claims that DeFi protocols have been used extensively for money laundering.

Chainalysis points out that illicit activities represent a small part of the transactions made in cryptocurrencies. In 2021, criminal activity only represented 0.15% of exchanges, against 0.34% in 2020 and 2.1% in 2019. This is a new all-time low for the crypto-asset sector, far from be the preserve of dark web criminals.

However, the overall volume of transactions, legal or illegal, literally exploded last year. “Total transaction volume increased to $ 15.8 trillion in 2021, up 567% from 2020 totals”, explains the report. Clearly, criminals are not using cryptocurrency any more than they used to.

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