$12 Billion in Crypto Has Been Stolen Over the Past Decade
Crypto and blockchain have come a long way since the launch of Bitcoin in 2009. They’ve both become leading technologies, revolutionizing many major industries and opening the door for the creation of new ones.
The speedy evolution has attracted the attention of many investors, which is great for the development and adoption of crypto and blockchain tech. However, the lack of regulation or oversight over most cryptocurrencies effectively translates to a lack of investors’ legal protection.
Since Bitcoin’s creation, as much as $12 billion in crypto has been stolen. But, who stole it, and where is it now?
How Was $12 Billion in Crypto Stolen?
According to a report by Atlas VPN, based on data gathered by Crystal Blockchain, over $12 billion in crypto has been stolen from January 2011 to December 2021. The data shows that the most popular method of crypto-theft is the infiltration of crypto-exchange security systems, followed by DeFi protocol exploits and outright scams.
The first security breach of a crypto exchange was in 2011, with the breach of the Mt. Gox crypto exchange. As a result, over 850,000 bitcoins were stolen, worth $450 million at the time. The amount of money stolen through security breaches jumped to $645 million by 2014 and continued to grow until it amounted to some $3.2 billion in 2021.
Even though security breaches are the most popular method of crypto theft, scams represent the most losses overall. Scams amount to around 60% of all losses by volume.
Scammers prey on new crypto users and investors that are little informed and don’t know how to identify a legitimate cryptocurrency exchange platform. Although, the lack of regulation and oversight over crypto does play a major role in rendering crypto users and investors vulnerable to malicious agents.
Finally, there are DeFi hacks. These represent the latest practice in crypto theft. They began in 2020, with hackers stealing around $149 million worth of crypto from DeFi exchanges. However, this practice quickly became a trend, and by 2021, the total amount stolen through DeFi hacks totaled $1.7 billion.
Crypto Scams Hinder Widespread Adoption
Although security breaches are the most common method used for stealing crypto, DeFi hacks have steadily risen in popularity and crypto scams account for most crypto losses over the past decade. This problem stems from the lack of crypto regulation and oversight.
There’s no real need for government oversight as crypto exchange platforms can protect users from scams by implementing a Know Your Customer (KYC) system to prove user identity and detect malicious actors.
The fact is that the growing number of losses to crypto scammers negatively impact the widespread adoption of cryptocurrency.
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