Victor Ugochukwu · Dec 14, 2020 . 5min read
CipherTrace report states that DeFi Hacks are rising
According to CipherTrace crypto-related crimes have slowed down in 2020, however, DeFi hacks have been on the rise for a while now.
By Komal Joshi · Nov 16, 2020 . 5min read
According to blockchain analytics firm CipherTrace’s recent findings, DeFi hacks are rising. Contrarily, cryptocurrency-related crimes have decreased in 2020. With reference to the reports of CipherTrace, Reuters reported that cumulative losses from crypto theft, hacks, and fraud sank from $4.4 billion in 2019 to $1.8 billion in the first two quarters of 2020.
CipherTrace CEO, Dave Jevans, states that the overall deterioration in criminal activity in the cryptocurrency industry is due to the heightened security measures. Exchanges and other crypto players have exercised the guide and executed the plans to defend their funds properly.
DeFi Hacks account for 20% of crypto losses
CipherTrace states that there has been a rise in DeFi hacks, contrary to the decline in crypto crime this year. DeFi hacks were substantially less in 2019; however, recently they account for 20% of crypto losses from thefts and hacks. According to the reports, the booming DeFi platforms and the huge inflow of funds into the DeFi ecosystem makes it a popular target amongst hackers. However, one cannot ignore the fact that the rise of DeFi is the prominent reason for gaining hackers’ attention.
DeFi networks are permissionless by design. This implies that they usually require clear regulatory compliance. Moreover, anyone in any nation can avail them with limited to no consumer-verification difficulties associated. Thus, Jevans elucidates that DeFi can effortlessly turn into a shelter for money launderers. Businesses and individuals have been racing to introduce DeFi products to market that have not undergone security verification and validation. So people recognize that there is a loophole here, Jevans said.
The number of cryptocurrency and blockchain-based hacks has been declining during 2020. According to Atlas VPN, 2019 was a record year for blockchain hackers. They performed 94 victorious attacks in the 1st half of the year, while in the first half of 2020 there were 31. Throughout 2019 as a whole there were 133 successful attacks on blockchain networks. The company says that 2020 will not enter the record heights of last year. The hacks will continue to decrease henceforth.
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