The images are courtesy of LightRocket.
The market for cryptocurrencies saw a lot of growth in the year 2021. A new study from Chainalysis shows that there was a steep rise in illegal activity after the rally.
The total amount of money received by illegal addresses in the year of 2020 was $7.8 billion, but in the year of 2021, the total amount received was a new all-time high of 14 billion.
The total volume of transactions in the space increased by 550% last year, according to the firm.
Kim Grauer, head of research at Chainalysis, told Insider that the amount of legitimate activity grew faster than criminal activity. She said that the increase in crimes has never been smaller than legal transactions.
Still, there were many illegal activities. Chainslysis said that criminal abuse of digital assets threatens broader institutional adoption.
The threat of NFT-related frauds and the ongoing threat of ransomware were included in crimes that Chainalysis observed. The two trends that stood out last year were scamming and stealing funds.
Chainalysis
It's scamming.
The value of fake coins that were used to cheat people increased by 18% in the year 2020. A new type of scam in which creators quickly cash out their gains after developing what seemed like a legitimate token came from rug pulls.
Almost 400,000 people were unable to access their accounts when the top boss of Turkish exchange fled Istanbul.
Only one incident, which accounted for 90 percent of all rug pull revenue last year, was tracked by Chainalysis.
Grauer said that the smart contract code may be the reason for the scam culture in DeFi. She said anyone with the technical skills to create DeFi can have them listed in exchanges despite not having a code audit.
She told Insider that a lot of the code is open-sourced. Anyone can look for bugs in the code that they can exploit.
The rapid growth of the space is one of the reasons. The volume of DeFi transactions increased by 912% in the year 2021.
Stealing money.
The revenue from stealing was over $5 billion in 2021.
Almost all of last year's total was stolen from DeFi protocols, according to Chainalysis. In 2020 it was just under $162 million.
In the year 2020, there were scattered examples of DeFi protocols being used for laundered funds. Money laundered increased by 1,964% compared to 2020.
Grauer hopes that next year we don't see a lot of hacking of DeFi protocols because he hopes that people will realize the importance of taking security measures to protect their platforms.
Business Insider has an original article.
