Crimes Related To Cryptocurrency Increased To Almost 80% In 2021

Last year, cryptocurrency-related crime was valued approximately $14 billion, a 79 percent increase from $7.8 billion in 2020.

According to Chainalysis, as of the first week of the new year, bogus addresses controlled approximately $10 billion in cryptocurrency. Based on a recent study, illicit addresses are wallets related to illegal behavior such as crypto theft via frauds, ransomware, and Ponzi schemes.

A substantial increase

Despite the large number, unlawful operations accounted for only 0.15 percent of the total $15.8 trillion in bitcoin transaction volume last year, a 550 percent increase over the previous year.

However, the total amount might potentially rise if the analytics company adds any other addresses tied to illegal activities to the total.

Chainalysis, for example, predicted that 0.34 percent of cryptocurrency transactions in 2020 would be associated with illegal activity, rising to 0.62 percent in 2021.

With the exception of a single dramatic outlier in the form of the multibillion-dollar PlusToken Ponzi scheme in 2019, the proportion of crypto transactions associated with criminality is declining.

A new area of criminal activity

According to the study, decentralized finance is a new arena where illicit criminality has thrived, with a 912 percent increase in transaction volumes last year.

While the $162 million in cryptocurrency stolen from DeFi platforms accounted for 31% of all cryptocurrency stolen in 2020, it was a 335 percent increase from 2019.

According to Chainalysis, that figure climbed by 1,330 percent last year to $2.3 billion. “As indicated by the increase in DeFi-related crime, criminals constantly adopt new technology,” said Kim Grauer, Chainalysis’ head of research.

“As DeFi gained popularity this year, we saw an increase in the usage of DeFi protocols to launder money, as well as DeFi protocols being actual victims of crimes like hacking,” Grauer noted.