In Brief:
- According to Chainalysis, cryptocurrency-linked crimes have hit a record $14 billion in 2021.
- The total transaction volume in 2021 grew to $15.8 trillion, up 567% from what was witnessed in 2020.
- The report also concludes that the increase in stolen funds and scams can largely be due to the rise in DeFi.
On Thursday, the blockchain analysis firm, Chainalysis released a blog reporting that crypto crimes have hit a record $14 billion in 2021.
Thus, this analysis further demonstrates that the digital currencies of $14B received by illegal addresses have certainly surged up 79% from $7.8B which was the value recorded in the year 2020.
Surprisingly, in 2021, total transaction volume grew to $15.8 trillion, up 567% from what was witnessed in 2020. As there has been considerable growth in the adoption of cryptocurrencies, it is beyond doubt that more cybercriminals are using cryptocurrency.
However, another catch in the observation is that the increase in illegal digital currencies was just 79% which is far lesser than would have been the case.
Nevertheless, Chainalysis also stated in the same breath that $14 billion worth of illicit activity does represent a significant problem.
Chainalysis observed that as of early 2022, illicit addresses already hold over $10 billion worth of cryptocurrencies; a large chunk of which is held by wallets linked with crypto theft.
Having said that, in 2021, the illicit activities’ share of total crypto transaction volume marked low at just 0.15%. At the same time, Chainalysis said that this percentage could still go up as the firm identifies more addresses tied to illegal transactions and integrates that into the total volume.
The report also concludes that the increase in stolen funds and scams can largely be attributed to the rise in decentralized finance, or DeFi, which aids in crypto-denominated lending outside traditional banking.
For instance, less than $162 million worth of cryptocurrency was stolen from DeFi platforms in 2020. This was 31% of the year’s total amount stolen. Note that, this finding of 2020 represents a 335% increase over the total cryptocurrency stolen from DeFi platforms in 2019.
Chainalysis pointed out that this figure rose another 1,330% to $2.3 billion in 2021.
Thus, DeFi transaction volume rose 912% in 2021. Chainalysis mentioned that the huge gains on decentralized tokens like Shiba Inu have forced investors to venture on DeFi tokens.
Recently, in the light of growing Crypto scams, Chainalysis had reported that in 2021, cryptocurrency scammers made about $8 billion in revenue led by rug pulls.
