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11th January 2022


Scamming was greatest in cryptocurrencies accessing over 79% losses for fraud and money laundering. Scammers took $14 Billion in cryptocurrencies in 2021 biggest was extracted from decentralized finance (Defi) companies. The hacking of cryptocurrencies and illegal mining within the Defi lures scammers for theft and fraud. Defi is one of the largest platforms for the cryptocurrencies ecosystem presenting a tremendous opportunity to entrepreneurs and cryptocurrencies users. 


Crypto-related crimes were all-time high but, the transaction rate for crypto exchange was surprisingly low. It was hard to conclude that all crimes were committed under the crypto ecosystem. Transactions involving illicit addresses represented an all-time low of just 0.15% of the $15.8 trillion in total crypto trade volume in 2021. The researcher firms identified illegal activities as 79% was crypto trade. 


Defi platforms were major contributors to crypto-related crime. Defi transaction volume grew 912% in 2021, according to Chainalysis stats. Impressive returns on decentralized tokens like Shiba Inu also spurred a feeding frenzy among Defi tokens. One major problem with Defi accounts was backtracking to origin and vulnerability to the new protocols. It helped scammers in finding a loophole in the system for illegal transactions. 


More than $2.8 billion of this total came from a relatively new but very popular type of scheme known as a “rug pull,” in which developers build what appear to be legitimate cryptocurrency projects, before ultimately taking investors’ money and disappearing.


Concluding evidence shows a hit rate of 67% for the illegal transactions in 2021, and new systems and protocols were unable to identify the bad actors, which led to a massive loss in the new currency system. 2022 might bring in some modifications and adoptions of updated rules and regulations to fight and catch money launderers. 


Source: CNBC

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