Report of Blockchain & crypto analytical firm, Ciphertrace, reveals crypto criminals are now more interested in Decentralized Finance (DeFi). They are now up for DeFi protocols and apps to execute their nefarious designs. The impact of their crimes is going to be bigger than ever before, leaving behind past scams as well.
Ciphertrace has been rendering blockchain analytical and intelligence services for a while and has issued a number of comprehensive reports. No one within the crypto community has ever challenged the findings nor doubted the predictions contained in Ciphertrace’s reports.
Now this blockchain intelligence firm has issued a recent report covering the aspects of money laundering and crimes relating to crypto. In this report, Ciphertrace suggests that it has very strong apprehension that crypto criminals have diverted their attention towards DeFi. It said that as per independent analysis based on the intelligence, crypto criminals are working on protocols and apps concerning DeFi. The report suggests that the ratio of the crypto crime rate has evolved immensely since 2020.
The report notes that the crypto industry and crypto transactions have become secure over time. There are only a couple of breaches that had occurred through which roughly US$ 432 Million had been lost. Compared with the losses borne by the crypto industry in the past years, the loss of US$ 432 Million is nothing. The report also highlighted the losses suffered in 2020 by the crypto industry and reported them to be almost US$ 2 Billion.
This stat clearly shows that it is becoming hard for crypto criminals to make their living in the given circumstances. If they cannot earn their share from the crypto industry, then obviously they will move on to other industries. They have found the alternative and that alternative to them is the DeFi sector, which is prone to risks easily compared to crypto.
It was pointed out in the report that since January 2021 to date, an amount of US$ 156 Million has been lost to crypto criminals. Most importantly, the report reveals that this US$ 156 Million reflects the loss that has been solely borne by the DeFi sector. This is even larger than what had been suffered by the sector in the past year. The only difference is that in only 4 months, 2021’s losses have exceeded the 2020 loss. This is not only surprising but also quite alarming.
The major reason for DeFi based criminal activity is because of the sector’s rise in the past year which is continuing as of now. Secondly, the end-users are rather more prone to being influenced easily by the criminals because of smart contracts’ vulnerability.
So there is an imminent danger concerning the DeFi sector for which mostly Ethereum users will have to be very careful.