Crypto Crimes Continue to Decline But DeFi Hacks & Frauds Surge Over 2.7x: CipherTrace Report
Over three-quarters of the total cryptocurrency hacks in the first seven months of the year occurred in decentralized finance (DeFi) space, according to a report from crypto intelligence company CipherTrace.
This has been while crypto crimes, in general, are declining as in 2019 they totaled $4.5 billion, then dropped to $1.9 billion last year, and now this year, as of the end of July, it further dropped to $681 million.
While the crypto industry is growing, DeFi is at the center of attention that started gaining traction only last year. From $600 million in total value locked (TVL) at 2020 beginning, DeFi currently boasts $140 billion in TVL.
The market cap of DeFi has also gone up to $113.7 billion, from $1.8 billion at the beginning of 2020, as per CoinGecko.
So, as the DeFi sector grows and matures, much like the entire crypto industry, scams and frauds will also decline here.
A majority of the DeFi volume netted by criminals is actually tied to outside agents as DeFi-related hacks make up $361 million—76% of all DeFi-related crime, with the remaining 24% being rug pulls tallying over $113 million year-to-date.
DeFi-related hacks total $361 million, increased 2.7x increase from last year, while DeFi fraud increased more than 2.8x this year.
According to CipherTrace's “Cryptocurrency Crime and Anti-Money Laundering Report,” DeFi-related fraud made up 54% of major crypto fraud, up from a mere 3% in 2020.
On Tuesday, a hack on DeFi platform Poly Network alone ended up draining more than half a billion dollars (about $600 mln).