By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - Cryptocurrency crime surged to a record high last year in terms of value, with illegal addresses receiving $ 14 billion in digital currencies, up 79% from $ 7.8 billion in 2020, according to a blog by blockchain analytics firm Chainalysis. released Thursday.
In early 2022, Chainalysis said that illicit addresses already contain more than $ 10 billion in cryptocurrencies, and most of them are in wallets associated with crypto theft.
Illicit addresses are defined as wallets linked to criminal activities such as ransomware, Ponzi schemes, and scams.
That said, the share of illicit activities in total crypto transaction volume remained low at just 0.15% in 2021. Total transaction volume increased to $ 15.8 trillion last year, more than 550% from 2020 levels.
Chainalysis, however, said the 0.15% figure could still rise as the company identifies more addresses linked to illegal transactions and incorporates them into the total volume.
In its latest report on crypto crimes, Chainalysis had said that 0.34% of crypto transactions in 2020 were associated with illegal activities. That number has now risen to 0.62%.
"Criminal abuse of cryptocurrency creates huge impediments to continued adoption, increases the likelihood that governments will impose restrictions, and worst of all, victimizes innocent people around the world," said Chainalysis.
Still, the underlying trend suggested that with the exception of 2019, an extreme year for crypto crime due in large part to the billion-dollar Ponzi PlusToken scheme, crime has become a small part of the world of crypto. cryptocurrencies.
The report also said that the rise of decentralized finance, or DeFi, which facilitates cryptocurrency-denominated loans outside of traditional banking, has been a major factor in the rise of stolen funds and scams.
In 2020, less than $ 162 million worth of cryptocurrency was stolen from DeFi platforms, which was 31% of the total amount stolen for the year. That represented a 335% increase over the total stolen from DeFi platforms in 2019.
In 2021, that number rose another 1.330% to $ 2.3 billion, Chainalysis said.
DeFi transaction volume increased 912% in 2021, and Chainalysis said that gargantuan gains in decentralized tokens like Shiba Inu have pushed investors to speculate on DeFi tokens.
"The rise in crime related to DeFi is an example of how criminals often exploit new technologies," said Kim Grauer, head of research at Chainalysis, in an email to Reuters.
"When DeFi started to grow this year, we saw huge increases in DeFi protocols that are used to launder money, as well as DeFi protocols that are the actual victims of crimes like hacking."
(Reporting by Gertrude Chavez-Dreyfuss in New York; Edited by Matthew Lewis)
