Crypto Crimes Report – Know This to Protect Your Wallets

The crypto market has seen its fair share of attacks and scams since its inception with Bitcoin.

But over the past year, rapid growth has acted as a catalyst for cybercriminals, making the crypto space both a target and a tool for their illicit activities.

Crypto market since June 2021

According to mid-year blockchain security and AML report From SlowMist, the number of incidents on blockchains between January and June followed an upward trend.

Ethereum, Binance Smart Chain (BSC), and NFT-related attacks dominated the space.

About 77% of these incidents were caused by the project’s own vulnerabilities. Thus, resulting in a loss of approximately $1.84 billion.

Another 21% of them were mostly scams such as phishing and carpet pulling, which caused a loss of $130 million in six months.

Majority of attacks are caused by project vulnerabilities | Source: SlowMist

Attacks and scams cannot be predicted. But the increase in crypto crimes can be attributed to the sudden rise in popularity of blockchains and DeFi protocols.

Between June 2021 and June 2022, the total number of blockchains in the crypto space increased by 284% (from just 31 to 119).

Growth of Blockchains between June 2021 and June 2022 | Source: SlowMist

Chains like Solana and Avalanche have led to an increase in the number of DeFi protocols.

Today, Ethereum, BSC, Avalanche, Polygon, and Fantom alone host over 1,600 protocols. Thus, dominating 73% of the total value locked (TVL) on DeFi chains.

However, over time, these vulnerabilities are taken care of. Credit goes to whitehat hackers and education regarding web3 adoption.

Increasing user awareness reduces the chances of scams and sweepstakes. And, the government is starting to take steps to limit the possibilities of crypto crimes.

The latest decision was the blacklisting of Tornado Cash. The platform that has been the backbone of money laundering by groups like Lazarus.

According to the report, approximately 74.7% of all funds laundered on the Ethereum blockchain were received by Tornado Cash amounting to 300.16k ETH ($563.8 million).

Tornado Cash Receives 74% of Ethereum’s Illicit Funds | Source: SlowMist

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