CipherTrace: “Crime in the DeFi sector is on the rise”

This year, according to the analytical company CipherTrace, losses from cryptographic fraud have decreased, but the number of crimes in the DeFi industry has increased.

As Reuters reports citing CipherTrace, losses from theft, hacking and fraud in the cryptographic industry fell to $1.8 billion in the first ten months of the year, down from $4.5 billion
in 2019;

“We noticed that exchanges and other players in the cryptographic industry have implemented more security measures,” said Dave Jevans, CEO of CipherTrace. “They have put in place procedures to better secure assets. Now we’re going to see fewer major break-ins.”

At the same time, the number of crimes in the decentralized finance sector (DeFi) is increasing. So far this year, losses from cryptovoltaic theft and hacking, excluding fraud, have increased to $468 million at the end of October, which is 30% more than $361 million for the entire last year;

About 20% of the losses, $98 million more, were related to crimes in the DeFi industry. According to data DeFi Pulse, the total value of cryptographic assets blocked in DeFi protocols is $12.6 billion. The vast majority of these cryptographic assets entered the industry in 2020. At the beginning of the year, this figure barely exceeded $1 billion. The growing popularity of DeFi attracted hackers, who repeatedly exploited vulnerabilities in the protocols;

“Companies and individuals rushed to market DeFi products that didn’t pass proper security checks,” Jevans said. “That’s why the scammers found vulnerabilities in the protocols.”

Recall that hackers attacked recently
protocol of Harvest Finance’s decentralized finance and were able to withdraw $25 million worth of crypto assets. This year, the decentralized credit protocol bZx was hacked three times. Damage from the first two attack
did not exceed $1 million, but during the third attack the attackers managed strength
cryptov currencies worth $8 million