Cryptocurrency-related crime was worth about $14 billion last year, up 79% from $7.8 billion in 2020.
According to Chainalysis, fraudulent addresses controlled about $10 billion worth of cryptocurrencies as of the first week of the new year.
Illicit addresses, according to the research, are wallets linked to criminal activity like crypto theft via frauds, ransomware, and Ponzi schemes.
A significant increase
Despite the high number, illegal operations accounted for only 0.15% of the $15.8 trillion in overall bitcoin transaction volume last year, a 550% rise from the previous year.
However, the total sum might potentially climb when the analytics business adds any additional addresses linked to unlawful transactions to the total.
For example, Chainalysis projected that 0.34% of crypto transactions in 2020 were linked to criminal behavior, rising to 0.62% in 2021.
However, with the exception of a single extreme outlier in the shape of the multibillion-dollar PlusToken Ponzi scheme in 2019, the proportion of crypto transactions related to criminality is decreasing.
A new field for crime
The research highlighted decentralized finance as a new field in which illicit crime has flourished, citing a 912% increase in transaction volumes last year.
While the $162 million in crypto taken from DeFi platforms accounted for 31% of all crypto stolen in 2020, it was a 335% rise from 2019.
According to Chainalysis, that figure increased by 1,330% to $2.3 billion last year.
“Criminals routinely adopt new technology, as evidenced by the surge in DeFi-related crime,” said Kim Grauer, Chainalysis’ head of research.
“As DeFi became more popular this year, we witnessed a rise in the use of DeFi protocols to launder money, as well as DeFi protocols being the actual victims of crimes like hacking,” Grauer added.
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