In H1 2021, DeFi accounted for 76% of major crypto hack volume and 54% of major crypto fraud volume, according to CipherTrace.
Crypto risk intelligence firm, CipherTrace has published a new report showing that DeFi (decentralised finance) accounted for 76 percent of major crypto hacks in 2021.
The report says by end-July 2021, major crypto thefts, hacks, and frauds totalled USD 681 million.
“While this number continues to be dwarfed by previous years’ highs, a breakdown of the types of thefts and fraud confirms a trend observed at the beginning of last quarter—DeFi-related crimes continue to grow quarter over quarter, with Q2 2021 netting criminals new highs in DeFi-related proceeds.”
DeFi-related hacks totalled USD 361 million by July 2021, making up three-quarters of total hack volumes this year, a 2.7-times increase from 2020.
DeFi-related fraud is also rising. accounting for 54 percent of major crypto fraud volumes in H1. In 2020, DeFi-related fraud only made up 3 percent of the year’s total.
The report says the proliferation and escalation of ransomware targeting critical infrastructure marks “another disturbing trend” in 2021. In July, REvil ransomware actors demanded USD 70 million for universal decryption keys – the highest ever reported ransom.
On the regulatory front, the report says countries are set to accelerate implementation of the “Travel Rule” in the crypto industry, following the FATF’s (Financial Action Task Force) July report declaring that no jurisdictions reported any VASPs (virtual asset service providers) being fully compliant.
The lack of Travel Rule implementation globally is a major obstacle to effective global AML/CFT mitigation, the report says. “As such, the FATF has indicated that one of its major next steps will be to accelerate the implementation of the Travel Rule across the world.”
The full report is published here.