Crypto Scammers Made $2 Billion In 2020 Alone, CipherTrace Reports
The dangers posed by the hoodlums who are terrorizing the growth of a market that is predicted to be the largest investment space in the world by 2030 cannot be overestimated. Every new day or week, scammers and hackers devise innovative ways to attack exchanges, investors, and crypto traders.
The implication of the frequency in such reports daily now means that several law enforcement agencies of many countries like F.B.I. have now had to step up their investigation. In a new analysis compiled by CipherTrace, it had now highlighted that about $2 billion of losses incurred in the cryptocurrency space last year were lost in the hands of scammers.
Ponzi schemes and scams made 60% of the gross funds lost
The Blockchain firm that is tasked with providing different financial compliance services for several financial institutions across the world had just recently released its report for 2020. The report discovered that a total of about $2 billion was carted away by cryptocurrency scammers last year. The WoToken, a Chinese affiliated Ponzi scheme currently related to the Plus Token ponzi scam in 2019, made over a billion dollars in 2020.
It is also worthy to note that the team of scammers behind the WoToken, whom the majority of them were arrested in mid-last year by the Chinese financial regulatory body, had also used the Plus Token to generate about $2.7 billion the previous year. The CipherTrace report had also highlighted that about $56 million were lost by crypto investors to Ponzi schemes and scams like Centra Tech and Banana.fund, while several other scams were also accounted for in the reports.
The DeFi space’s growth, which saw its total value locked(T.V.L.) increase by more than 1000% in less than 12 months, had also aided scammers to make at least $130 million in DeFi exit scams from the space. Harvest Finance, Pickle Finance, and a few other exit scams made it to the list as the highest earners in the DeFi rug pulls.
Some crypto exchanges might be aiding scammers
The case of money laundering also continues to gain mainstay in the cryptocurrency, CipherTrace reports. The report highlighted several exchanges have been making profits from aiding scammers and hackers to launder stolen proceeds. The report also detailed that about $9 million were received by U.S. based exchanges in 2020 alone, and they sent more than $41 million back to the criminals.
While the report was detailing the number of losses suffered by crypto users, the good news is that the number of hacks has drastically reduced compared to 2019. The calls made to crypto exchanges and firms by the public and financial regulators of several bodies to beef up security seem to have started to yield tangible results. However, the cryptocurrency space, particularly DeFi space, need to start taking desperate measures against the scammers who seem to be gaining ground in the booming space.