Crime in the decentralized finance (DeFi) sector hits an all-time high as the cryptocurrency market faces big volatility over altcoins season, CipherTrace has learned. According to a report, the DeFi market had almost a quarter of Ethereum’s total market cap by the end of 2020.
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However, DeFi's rapid growth also attracted more bad actors as over 70% of all of 2021’s major hacks and fraud thus far were DeFi-related, CipherTrace emphasized. The company's analysts found that attacks on DeFi made up over 60% of the major hack and theft volume in 2021. By the end of Q3, 2021, bad actors netted approximately $240 million from DeFi.
CipherTrace noted that rug pull scams have added an additional $83.4 million, which is over 200% of 2020’s DeFi-related fraud volume. In total, cybercriminals netted $432 million as of end-April. Approximately 56% of that were DeFi crimes.
Last April, the UK's Crown Prosecution Service (CPS) warned there are more prosecutions with cryptocurrency scams on the way as bad actors "increasingly turn to cyber fraud," said Max Hill QC, Director of Public Prosecutions at the CPS. According to UK Finance, the banking watchdog, almost £500,000 (~$695,000) was sent to fraudsters via bank transfer in March this year.
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