A new report claims that criminal activities related to cryptocurrency have slowed down in 2020, but some areas in the crypto industry have become new hotbeds of criminal activities.
On November 10, Reuters quoted a report from CipherTrace, a major cryptographic analysis company, stating that the total losses caused by crypto theft, hacking and fraud fell from $4.4 billion in 2019 to $1.8 billion in the first 10 months of 2020.
CipherTrace CEO Dave Jevans said that the general decline in criminal activity in the crypto industry is the result of increased security measures.
“What we see is that exchanges and other cryptocurrency players have implemented more security procedures. They have accepted guidance and implemented related procedures to better protect their funds. Therefore, large-scale hacking will Will decrease.”
Despite the sharp decline in crypto crime this year, CipherTrace reports that there has been a significant increase in decentralized finance (DeFi) hacking incidents. CipherTrace analysts found that although DeFi hackers were “nearly negligible” in 2019, they now account for 20% of the cryptographic losses caused by theft and hackers. The report pointed out: “The DeFi boom finally attracted criminal hackers, leading to the most hacking attacks in this field this year.”
Jevans said that the DeFi industry has also become a “safe haven for money launderers.” Since DeFi projects are permissionless in design, they often lack security verification tools for centralized projects. Jevans said:
“Some companies and individuals are rushing to bring DeFi products to the market. These products have not undergone security verification and confirmation. So people are beginning to discover a weakness here.”
The latest analysis by CipherTrace confirmed the previous report that cryptocurrency hacking is on a downward trend in 2020. At the end of October, VPN provider Atlas VPN released a study that stated that the number of blockchain-related hacking attacks in the first half of 2020 has dropped by more than three times compared with the same period in 2019.
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