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Crypto crimes caused record losses in 2021

 


Crypto scammers stole a whopping $ 14 billion last year. Still, this makes up a much smaller part of the total transaction volume than in any previous year.


Many still have the prejudice that the crypto space is a playground for criminal financial transactions, that crypto currencies are primarily used for the financing of terrorism and on the black market for the procurement of drugs and the like. However, a current analysis clearly refutes this hypothesis. It is true that cryptocurrency-related crime rose to a new high of $ 14 billion in 2021. The blockchain analysis company Chainalysis shows in its annual report on crypto crime an increase of 79 percent compared to the previous year. However, this must first be seen in relation to the increase in crypto prices in 2021.


But what is even more important: The aforementioned activity only accounted for 0.15 percent of the total crypto transaction volume. This totaled $ 15.8 trillion in 2021. The percentage is the lowest ever. In return, the total transaction volume has increased by a full 567 percent compared to 2020, according to Chainanalysis.


DeFi sector particularly affected by crime

Nonetheless, the report also contains words of caution:


However, we also need to weigh the positives of the growth in legal cryptocurrency usage with an understanding that illegal activity worth $ 14 billion is a significant problem. The criminal misuse of cryptocurrencies creates enormous barriers to further spread and increases the likelihood that governments will impose restrictions [...]


Chainanalysis 2022 Crypto Crime Report Preview


However, there is also progress made by the investigative authorities in the fight against crypto-crime, according to Chainanalysis. According to the analysts, the emerging DeFi sector in particular cannot reach its full potential. Because in many cases it is still the case that the same decentralization that makes it so dynamic also allows widespread fraud and theft.

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