New report reveals an alarming new trend in which decentralised finance hacks now make up more than 60% of the total crypto thefts and hacks volume.
In 2019, DeFi hackers were virtually non-existent, explained CipherTrace in its “Cryptocurrency Crime and Anti-Money Laundering Report.”
By the end of April 2021, major crypto thefts, hacks and frauds totaled $432 million of which 56% were DeFi related. The total sum stolen in DeFi related hacks in the first five months of 2021 has already surpassed the $129 million stolen in DeFi related hacks in 2020.
Losses in the crypto sector due to fraud and crime totaled $1.9 billion in 2020, whilst losses hit a record $4.5 billion in 2019. The decrease in crypto crime reflects the industry’s maturation - as companies and exchanges improve their security systems.
However, DeFi is a completely different story. The number of loans on DeFi platforms was $86 billion as of last week, roughly a 600% increase from $11 billion in October 2020.
Dave Jevans, CipherTrace’s chief executive officer said:
“As more money pours into the space from retail and institutional players, bad actors will seek to take advantage of the hype to draw people into scams and hackers will seek out projects that have launched without performing adequate security audits, exploiting loopholes encoded in the smart contracts.”
For more information make sure to tune into Nick Furneaux’s talk “Crypto 2.0 - New ways of performing old tricks? Exploring Crypto Typologies” at FinCrime World Forum on Wednesday 23 June at 2:50pm.