Losses from theft of cryptocurrencies in 2020 decreased

Losses from cryptocurrency theft, computer hacking, and fraud fell 57% last year to $ 1.9 billion. In 2019, cryptocurrency crimes caused a record $ 4.5 billion in damage. This data is presented in a report from the research company CipherTrace. The researchers note that the reduction in losses is due to the strengthening of security measures by market participants. At the same time, crime in the field of “decentralized finance” continues to grow.

Cryptocurrencies have attracted a lot of attention from market participants, as institutional investors have invested in them, in particular in Bitcoin, significant funds. This is evidenced by the rapid growth in the value of the most famous cryptocurrency.

In 2020, the main type of cryptocurrency crime was fraud. This is followed by theft and extortion through programs. Half of all thefts, or roughly $ 129 million, come from Decentralized Finance (DeFi) – transactions on platforms that bypass banks.

The total amount of DeFi loans has approached $ 25 billion. For comparison: as of August last year, this amount was approximately equal to $ 4 billion. DeFi sites operate on an open infrastructure with algorithms that set rates in real time based on supply and demand.

“DeFi platforms enjoy many exceptions to traditional regulatory enforcement regimes faced by centralized exchanges, money service businesses, and banks,” the CEO of CipherTrace explained the popularity of decentralized finance. “For example, DeFi platforms do not have to do customer verification or prevent money laundering on transactions. This makes them an ideal place to move and launder money. ”