Tue, June 18, 2024

Blockchain Security Firm, Report, and Interesting Details

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Cryptocurrencies gained popularity in different parts of the world, as in the case of fiat currencies there are certain challenges as well. Unfortunately, there are a lot of crypto-related crimes and it is quite hard to investigate such cases. Hopefully, crimes targeting cryptocurrencies fell by more than half in 2020, based on the information provided by the blockchain security firm CipherTrace.

Let’s have a look at the report prepared by CipherTrace. According to the firm’s 2020 cryptocurrency crimes and anti-money laundering report, losses from cryptocurrency theft hacks as well as fraud dropped 57% in last year to $1.9 billion. Mainly, thanks to improved security systems. As a reminder, the same figure in 2019 reached a record $4.5 billion.

Based on the information provided by the blockchain security firm, massive exit scams such as PlusToken Ponzi dominated crypto-related crimes over the past two years, with that scam alone netting $2.9 billion. Interestingly, a similar scheme by some of the perpetrators called WoToken defrauded investors out of $1.1 billion in 2020. Importantly, it accounted for 58% of the year’s major crime volume.

Blockchain security firm and various crimes

According to the report prepared by the blockchain security firm CipherTrace, fraud is the dominant cryptocurrency crime, followed by theft, as well as ransomware. Hopefully, thefts from hacks against centralized exchanges continue to fall as the financial institutions started to pay more attention to security.

Nevertheless, last year saw a surge in decentralized finance-related crime. Interestingly, the majority of which were “rug pulls”. Importantly, that’s where a token is artificially hyped and inflated, with the creators as well as early investors pulling the plug after the pump leaving the latecomers out of pocket.

People should take into account that, half of the 2020 crypto hacks were of DeFi protocols. A pattern that was unimportant in the previous years. Moreover, nearly 99% of major fraud volume in the second half of 2020 stemmed from DeFi protocols performing “rug pulls” and other exit scams in a pattern that reminded the 2017 ICO craze. It is worth noting that, the largest theft in 2020 was also connected with DeFi sector.

Notably, the $281 million hack of the centralized exchange KuCoin, also involved the DeFi sector. As a reminder, criminals attempted to launder the stolen funds through Uniswap. It is the world’s largest decentralized exchange. People should pay more attention to the report prepared by the blockchain security firm. This way it will be easier to protect crypto assets from criminals.

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