A recent report by Crystal Blockchain, a provider of blockchain analytics and data, delved into security breaches, fraud, and scams associated with decentralized finance (defi) and cryptocurrency.
The report reveals that during the past 12 years, there were 461 incidents that took place in 45 countries, resulting in $16.7 billion in stolen crypto assets.
In terms of overall value, China ranks highest due to the Plus Token Ponzi scam in 2019 and the Wotoken Ponzi in 2020.
According to Crystal’s intelligence report, 231 defi hacks, 135 security attacks, and 95 fraudulent schemes were reported during this period. Defi hacks ranked second in terms of value, with $4.81 billion stolen, while scams resulted in more than $7.5 billion in stolen crypto assets.
Executive Summary & Key Findings
- This report covers data dated from the first crypto exchange hack (Mt. Gox) in 2011 up until February 18, 2023.
- 231 DeFi hacks, 135 security attacks, and 95 fraudulent schemes have been reported to have taken place in the last 12 years.
- Approximately $16.7 billion in cryptocurrencies has been stolen between January 2011 and February 2023.
- Illegal activity has continued to grow in the cryptocurrency and DeFi market in 2022 & the beginning of 2023.
- Since 2011, $4.5+ billion has been stolen through security breaches, $7.5+ billion has been stolen through scams, and $4,81+ billion through DeFi hacks.
- The most popular method of crypto-theft until 2021 was the infiltration of crypto-exchange security systems - currently the tendency has moved to DeFi hacks.
- CEX hacks are currently causing the least amount of financial damage. The largest CEX security breach is still Coincheck with $535m worth of NEM stolen.
- In 2022, the ratio of CEX versus DEX hacks was as high as 1:13.
- The largest DeFi hack to date is the incident involving Ronin Network from March 2022 (over $650 million). The hacker moved the majority of funds to Tornado Cash.
- DeFi hacks started trending and continue to grow, with over $4,81 billion stolen from such protocols.
- In 2022, stolen funds from the top 10 DeFi attacks exceeded USD $2.61 billion.
- Rug pulls have become very popular among fraudsters over the first half of 2022.
- Tornado Cash remains the most popular service for laundering funds on the Ethereum Blockchain.
- The most common locations for exchange security breaches are the United States, the United Kingdom, South Korea, Japan, and China.
- Non-Fungible Tokens (NFTs) trended in 2021, with the market capitalization for NFTs jumping by 1,785% in 2021. We saw several scams come to light in 2022 as a result.
- NFTs have become very popular among rug pull scammers. So far seven rug pulls based on NFT projects scammed their investors in the first half of 2022.
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