The crypto market saw rapid growth in 2021. With a jump of approximately 200% in the total market cap, digital currencies gained popularity among retail and institutional investors. However, scammers and fraudsters have also increased their activities in the last 12 months.
A recent report published by Chainalysis, one of the leading blockchain data platforms, shows that illegal crypto addresses received almost $14 billion in 2021, compared to $7.8 billion in 2020. Illicit activities related to crypto transactions reached an all-time high last year.
However, there is another side to the story. Overall crypto transaction volume jumped to $15.8 trillion in 2021, which is up by 567% compared to 2020. Due to an astonishing jump in the total volume, unlawful cryptocurrency transactions now account for just 0.15% of the volume.
“Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But, the fact that the increase was just 79%, nearly an order of magnitude lower than overall adoption, might be the biggest surprise of all. In fact, the growth of legitimate cryptocurrency usage [is] far outpacing the growth of criminal usage,” the report noted.
DeFi
Moreover, with investors pouring billions of dollars into DeFi products, crimes related to Decentralized Finance have jumped to record levels. According to Chainalysis, DeFi trading volumes spiked by more than 900% last year.
“Cryptocurrency theft grew even more, with roughly $3.2 billion worth of cryptocurrency stolen in 2021, a 516% increase compared to 2020. Roughly $2.2 billion of those funds, 72% of the 2021 total, were stolen from DeFi protocols. The increase in DeFi-related thefts represents the acceleration of a trend we identified in last year’s Crypto Crime report,” Chainalysis added.
