CipherTrace: “the number of crimes in the DeFi sector is growing

CipherTrace: “the number of crimes in the DeFi sector is growing

According to the analytical company CipherTrace, losses from cryptocurrency fraud have decreased this year, but the number of crimes in the DeFi industry has increased.

As reported by Reuters with reference to CipherTrace data, losses from theft, hacking and fraud in the cryptocurrency industry decreased to $1.8 billion in the first ten months of the year compared to 2019, when this figure reached $4.5 billion.

“We have noticed that exchanges and other players in the cryptocurrency industry have implemented more security measures,” said Dave Jevans, CEO of CipherTrace. “They have implemented procedures to better secure the assets. We will now face fewer major hacks.”

At the same time, the number of crimes in the sector of decentralized finance (DeFi) is growing. So far this year, losses from cryptocurrency-related thefts and hacks, excluding fraud, have risen to $468 million at the end of October, up 30% from $361 million for all of last year.

About 20% of the losses, at $ 98 million, are related to crimes in the DeFi industry. According to DeFi Pulse, the total value of crypto assets blocked in the DeFi protocols is $12.6 billion. The vast majority of these crypto assets entered the industry in 2020. At the beginning of the year, this figure barely exceeded $1 billion. The growing popularity of DeFi has attracted hackers who have repeatedly exploited vulnerabilities in the protocols.

“Companies and individuals have rushed to market DeFi products that have not passed proper security checks,” Jevans said. “So the scammers found vulnerabilities in the protocols.”

Recall that recently hackers attacked the
protocol of decentralized finance Harvest Finance and were able to withdraw crypto assets for $25 million. This year, the BZX decentralized lending protocol was hacked three times. The damage from the first two attacks did
not exceed $1 million, but during the third attack, the attackers were able to steal
$8 million worth of cryptocurrencies