In the past 6 months, the cryptocurrency industry has gained tremendous adoption and support from the individual as well as mainstream investors. The industry has been growing tremendously when it comes to the decentralized finance (DeFi) sector.
As the adoption rate in the decentralized finance (DeFi) sector continues to grow in size, so is the number of crimes. In recent months, the decentralized finance (DeFi) sector has become the favorite spot for the criminal syndicates to carry out their plans.
This claim is backed by facts and analysis carried out by one of the major analytics companies, Ciphertrace. A platform tends to run analysis on different aspects of the cryptocurrency and blockchain industry.
It collects data from individual or overall blockchains based on the requirement and generates detailed reports from the collected information.
His time, Ciphertrace has gone ahead and provided its analysis on the increasing crime rate in the decentralized finance (DeFi) sector. The firm has recently compiled the data in a report claiming that the majority of the crime rate in the crypto-sector has moved to decentralized finance space.
Out of the entire cryptocurrency industry, it is the decentralized finance (DeFi) sector, where the protocols and applications are falling prey to criminal activities.
The major reason behind the rise in crime rates in the decentralized finance (DeFi) sector is the very nature of the industry. As the industry is decentralized, then it means it is too difficult or impossible to track and trace any hackers carrying out the exploits.
Therefore, the majority of the cryptocurrency-related crimes are taking place in the decentralized environment, rather than the centralized environment. If a hacker commits a crime or an exploit in the centralized environment then there are high chances of them getting caught.
On the other hand, the decentralized platform is complex and not at all possible to trace. The only possible solution for decentralized finance (DeFi) platform is to stop the loss of further tokens on the protocols.
Ciphertrace has recently shared its findings around cryptocurrency crime rates in its cryptocurrency crime and AML report. In the report, Ciphertrace has provided a detailed analysis of the increase in the crime rate in the first four months of 2021.
In the report, Ciphertrace has revealed that the total number of funds stolen in the overall cryptocurrency industry in Q1 2021 is $432 million. On the other hand, the losses incurred in the entire year of 2020 were $1.9 billion.
The report shows that the crime rate is now increasing in the DeFi space. The report shows that in the first four months of 2021, $156 million out of the $432 million were stolen through the DeFi space. This figure has already surpassed the losses that were incurred in the entire year of 2020.