New reports from CipherTrace suggests that scammers stole $1.8 billion from crypto users in the first 10 months of October. This also means that 2021 could record the second-highest loss in value linked to digital currency crimes.
Crypto losses nearing $2 billion
Blockchain forensics firm CipherTrace said that 2021 could record the second-highest value in losses related to crypto crimes. In the first 10 months of the year alone, users lost $1.8 billion to crypto thefts, frauds, and hacks. This also happened because of the exponential growth in DeFi platforms that became lucrative targets for hackers as interest in this sector grew.
In 2019, the losses related to crypto crimes totaled $4.52 billion, marking a 160% increase on a yearly basis. In 2018, the users lost $1.74 billion. Last year, DeFi volume was negligible but in 200 the decentralized finance market exploded, especially during the summer. Assets locked into the DeFi smart contracts beaked at $14.2 billion in late October.
Uniswap-KuCoin laundering was one of the largest contributors
DeFi hacks make up 21% of the total crypto theft volumes in 2021, totaling to $98 million. Funds that were stolen during the KuCoin, totaling nearly $281 million, were laundered using Uniswap. The decentralized exchange is one of the largest in the world.
The report suggests,
“The USD value locked in DeFi has grown exponentially in 2021 thus creating potential new money laundering risks as hacked DeFi protocols make up the majority of crypto thefts in 2021 and decentralized exchanges were the ramp of choice for 2021’s KuCoin hack.”
Investor losses also increased because of the rise in cross-border transactions. These transactions marked 74% of the Bitcoins moved during exchange-to-exchange trades. Further analysis revealed that US-based Bitcoin ATM users sent about 88% of these funds to high-risk, offshore exchanges. The report also notes that the majority of funds were related to Ponzi schemes and investment scams. The remaining was contributed by fake token sales, phishing, fake crypto mixers, and blackmailing.
