Edward Snowden

Crypto Fraud Evolve – DeFi Crimes Hit Record High

Ciphertrace, a renowned cryptocurrency crime and blockchain analytics company, has stated that the crypto sector has become more secure, with losses from theft, hacks, and fraud amounting to only $432 million. This might seem like a large sum but is a smaller figure in comparison to those from previous years.

However, emerging trends are showing that most of the formerly crypto crimes are moving to decentralized financing( DeFi) protocols. This sector which is considered easier to tackle, has seen about $156 million go to scams and other exploits.

DeFi is more vulnerable to attacks as most are run autonomously. It is also susceptible to coding mistakes and logic errors.

 Ciphertrace released a report which shows that DeFi related hacks now constitute more than 60% of the total hack and theft volume. This is a significant increase from 25% percent in the previous year 2020 and a negligible percentage in 2019.

This evolution is attributed to growth in the DeFi sector, with more investors showing interest and opting for it. Its popularity is due to the fact that it is open to almost anyone, does not require middlemen, and allows interaction. 

Several DeFi players have been hit. This includes the Yearn Finance exploit, the Harvest Finance (FARM) hack, the hack on the PAID network, which would see the network lose up to 85% of its value. Security vulnerabilities in Easyfi, also a major player in the DeFi sector, resulted in the loss of $80 million. 

Ciphertrace has stated that the growth of the DeFi is likely to result in more of these cases in the future.

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