Cryptocurrency crime decreased in 2020, but DeFi hacks are on the rise

Cryptocurrency-related crime slowed down in 2020According to a new report, some sectors of the cryptocurrency industry have become new hotbeds for criminal activity.

Quote from the major cryptocurrency analysis company CipherTrace, Reuters reported on Nov. 10 that total losses from crypto theft, hacks, and fraud fell from $ 4.4 billion in 2019 to $ 1.8 billion in the first 10 months of 2020..

Dave Jevans, CEO of CipherTrace, said the general decline in criminal activity in the cryptocurrency industry is the result of increased security measures:

“We saw that exchanges and other crypto players implemented more security procedures […] They have adopted the guide and implemented the procedures to better secure their funds. So you will see fewer major hacks. “

Cryptocurrency crime decreased in 2020, but DeFi hacks are on the rise
Cryptocurrency crime decreased in 2020, but DeFi hacks are on the rise

Despite a sharp drop in cryptocurrency this year CipherTrace reported remarkable growth in DeFi hack incidents. While DeFi hacks were “practically negligible” in 2019, they now account for 20% of crypto losses through thefts and hacks, according to CipherTrace analysts.. “The rise of DeFi ultimately attracted criminal hackers, leading to the largest number of attacks on the industry this year,” the report said.

Jevans said the DeFi industry has also become a “money launderer’s paradise”. Because DeFi projects are not by design permissions, they often lack the security auditing tools of centralized projects. Jevans stated:

“Companies and individuals have been quick to bring DeFi products to market that have not been subject to security auditing and validation […] So people realize that there is a weakness here. “

CipherTrace’s latest analysis confirms previous reports that cryptocurrency hacks have declined in 2020. At the end of October, VPN provider Atlas VPN published a study claiming that the number of blockchain-related hacks had decreased in the first half of 2020. reduced more than three times compared to the same period last year.

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