Though crypto-related crimes have slowed within this year in 2020, but Defi sectors within the crypto industry became a new hotbed for criminal activity, a new report says.
In line with a recent official report by CipherTrace, Reuters reported on 10th Nov. that total losses from cryptocurrency thefts, hacks and fraud dropped from $4.4 Bln earlier in 2019 to $1.8 Bln over the primary 10 months of this year.
CipherTrace CEO Dave Jevans added that the overall decline of criminal activity within the crypto industry may be a results of increased security measures:
“What we’ve seen is that exchanges and other cryptocurrency players have implemented more security procedures. […] they need taken the guidance and implemented the procedures to secure their funds better. So you’re getting to observe less mass-scale hacks.”
Despite a serious decline within the cryptocurrency crimes this year, CipherTrace reported a notable growth of hacking incidents in decentralized finance, or DeFi. While DeFi hacks were “virtually negligible” in 2019, they now account for 20% of cryptocurrency losses from thefts and hacks, CipherTrace analysts found. “The surge in DeFi was what ultimately attracted criminal hackers, leading to the foremost hacks for the world this year,” the report adds.
Jevans revealed that the DeFi ecosystem has also become a “haven for money launderers.” Since DeFi projects are permissionless intentionally , they often lack the safety verification tools of centralized projects. Jevans added:
“Businesses and individuals have rushed DeFi products to plug that haven’t skilled security verification and validation. […] So people are deciding that there’s a weakness here.”
CipherTrace’s latest analysis confirms previous reports that cryptocurrency hacks are on the decline in 2020. Recently in October, VPN provider Atlas VPN released a study claiming that the amount of blockchain-related hacks within the half of 2020 dropped over 3x times compared to the same time period earlier in 2019.