CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$23,597.00
  • ethereum
    ETH$1,618.54
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    • Opinions
    CryptoPotato
    CryptoPotato
    • Crypto News
    • Margin Trading
    • Guides
      • Bitcoin & Crypto Guides 101
      • Bitcoin For Beginners
      • Editorials
    • DeFi & NFT
    • Buy
    • Language
    • Crypto News
    • Bitcoin For Beginners
    • Cryptocurrency Guides 101
    • Editorials
    • Bitcoin & Crypto Margin Trading
    • DeFi & NFT News
    • Bitcoin Price Analysis
    • CryptoPotato Crypto Fund
    • Ethereum (ETH) Price Analysis
    • Ripple (XRP) Price Analysis
    • Market Updates
    • Interviews
    • Buy Bitcoin with Card
    Home » Crypto News » Cryptocurrency Crime Reduced By 60 Percent in 2020 but DeFi Hacks Exploded

    Cryptocurrency Crime Reduced By 60 Percent in 2020 but DeFi Hacks Exploded

    Author: Himadri Saha

    Last Updated Nov 15, 2020 @ 12:03

    Mainstream crypto thefts, hacks, and fraud decreased by 60% for the first 10 months in 2020 compared to 2019. But Defi crimes rose substantially, according to a report from crypto intelligence company CipherTrace.

    In 2019, cryptocurrency-related crime – thefts, hacks, fraud amounted to $4.5 billion. The latest data from blockchain forensics company CipherTrace shows that this number has fallen to $1.8 billion this year – a 60 percent reduction. Nonetheless, the DeFi space has seen an explosion in criminal activity.

    Mainstream Cryptocurrency Crime Declining Says CipherTrace

    In a tête-à-tête with Reuters, CipherTrace CEO Dave Jevans observed that crypto exchanges and digital asset trading facilitators had upped their security game. This comes after more than decade-long exploitation of cryptocurrency platforms by hackers and malicious actors.

    This probably explains the massive 60 percent reduction in mainstream cryptocurrency crime from $4.5 billion in 2019 to $1.8 billion this year.

    What we have seen is that exchanges and other cryptocurrency players have implemented more security procedures. They have taken the guidance and implemented the procedures to secure their funds better. So you’re going to see less mass-scale hacks.

    But there was a disturbingly noticeable trend that CiperTrace researchers observed this year.

    Ugly Defi Hacks Accounted For 20 Percent Of Crypto Crimes in 2020

    The CipherTrace report pointed out that digital asset-related thefts and hacks, excluding misappropriation and fraud, amounted to $468 million as of October end. This is a 30 percent appreciation from the $361 million figure for the whole of 2019.

    ADVERTISEMENT

    DeFi hacks contributed to 20 percent of 2020’s number, according to the blockchain analytics company.

    About 20% of those hacks, or roughly $98 million, came from “decentralized finance” or DeFi, which are transactions on platforms that facilitate lending outside of banks.

    CipherTrace attributed this rising trend of DeFi attacks to the Ethereum-based ecosystem’s explosive growth in 2020. The total USD value locked in decentralized finance protocols is already on the way to touch the $13 billion mark.

    defi market growth
    Total USD Value locked in DeFi On The Verge Of Hitting $13 Billion, Source: DeFi Pulse

    This is a humongous growth compared to last year when the total DeFi market valuation merely clocked $680 million. Jevans observed that DeFi hacks in 2019 were near negligible, but this year

    Companies and individuals have rushed DeFi products to market that have not gone through security verification and validation. So people are figuring out that there’s a weakness here.

    The CipherTrace boss even went forward and called the DeFi markets a potential ‘haven for money launderers.’ Why? Because DeFi protocols are permissionless by design, and this substantially reduces the access barrier for users across the world.

    With DeFi  networks permissionless  by design,  which means they often lack clear regulatory compliance, anyone in any country is able to access them  with little to no customer-verification hurdles involved.

    Ethereum’s DeFi space is growing by leaps and bounds, but will it encourage hackers to carry out much more massive exploitations in the future? Additionally, will it actually become a vehicle for financial criminals? That still remains to be seen.

    SPECIAL OFFER (Sponsored)
    Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

    PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

    You Might Also Like:

    • MetaMask Tops 1M Monthly Active Users Following The 2020 DeFi Boom
    • DeFiGrowth
      Report: Q3 2020 Was The Best Quarter For DeFi
    • 4 Things That Could Cause the DeFi Bubble to Pop
    Tags: Crypto Scams DeFi
    Enjoy reading? Share with your friends
    Facebook Twitter LinkedIn Telegram

    About The Author

    Himadri Saha
    More posts by this author

    Himadri’s love affair with cryptocurrencies began in 2016. Since then he has been a vocal proponent of crypto as a robust investment alternative to traditional options. Himadri believes that art and code can redefine the way we look at life. Contact Himadri: LinkedIn

  • bitcoin
    BTC$23,597.00
  • ethereum
    ETH$1,618.54
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    Editorials
    2022 Was Crypto’s Dot Com Bust: Let’s Recap Tech Stocks After 2000 (Opinion)

    2022 Was Crypto’s Dot Com Bust: Let’s Recap Tech Stocks After 2000 (Opinion)

    How Long Will the Ethereum LSD Narrative Last? Talking 2023 Trends with Nansen’s Martin Lee

    How Long Will the Ethereum LSD Narrative Last? Talking 2023 Trends with Nansen’s Martin Lee

    Everything That’s Going on With Pi Network: From Start to Latest Controversial Listing

    Everything That’s Going on With Pi Network: From Start to Latest Controversial Listing

    What is Ethereum Liquid Staking and Why It Is Crucial As Shanghai Upgrade Approaches?

    What is Ethereum Liquid Staking and Why It Is Crucial As Shanghai Upgrade Approaches?

    The Lesson in Alameda-FTX About Government Regulation and Crypto (Opinion)

    The Lesson in Alameda-FTX About Government Regulation and Crypto (Opinion)

    5 Bullish and 2 Bearish Cases for DeFi Going Into 2023 (Opinion)

    5 Bullish and 2 Bearish Cases for DeFi Going Into 2023 (Opinion)

    From Google and Microsoft to Binance: Interview with Head of Product Mayur Kamat

    From Google and Microsoft to Binance: Interview with Head of Product Mayur Kamat

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    Footer Logo
    About
    Advertise on CryptoPotato
    About Us | Contact Us | Careers
    Editorial Policy
    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!