The year 2020 hasn’t been off to a great start. With a circulating pandemic that wreaked havoc in all parts of the world, crypto scammers are still on the rise.
According to blockchain forensics CipherTrace, 2020 has become the second-highest year in terms of cryptocurrency-related crimes, averaging a total of $1.8 billion stolen money within the first 10 months of the year. Due to the increase of DeFi platform users, this paved the way for crypto hackers to utilize it for malicious purposes, making it the main target for money theft and laundering.
In 2018, cryptocurrency crimes surged to a total of $1.74 billion followed by a drastic increase in 2019 amounting to $4.52 billion theft. Since the DeFi platform has been utilized by the decentralized finance market with crypto-assets lock, it reached a full amount of $14.2 billion on October 27 and an average of $98 million hacks in 2020. Meanwhile, funds from KuCoin have been laundered through Uniswap, amounting to nearly $281 million.
CipherTrace also mentioned in the report that, ‘The USD value locked in DeFi has grown exponentially in 2020 thus creating potential new money laundering risks as hacked DeFi protocols make up the majority of crypto thefts in 2020 and decentralized exchanges were the ramp of choice for 2020’s KuCoin hack.’
The company also stated that crypto scammers use the pandemic as an opportunity to take advantage of people by disguising themselves as a member of a well-known health or charity organization to delude others in sending bitcoins through the platform.
Additionally, the report stated that even several major US banks were oblivious to undetected crypto transactions, processing a total of $2 billion scams per year. These banks mentioned that scammers used funds from businesses in line with money and dressed it as normal cryptocurrency exchanges.
Furthermore, China is also suffering from a huge loss created by a Chinese cryptocurrency exchange, TokenBetter. Users complained to the government about money return since it went offline without notice and showed their exasperation on social media regarding the abrupt shutdown of the platform. To address the concern, police are currently investigating the authorities who went ahead of their digital yuan launch to alleviate the suspected scam.
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