Chainalysis, an blockchain research firm, reported that crypto scams reached an all-time high last year of $14 billion. That’s because regulators want more power in this rapidly-growing market.
Major Scams are being fueled by growing interest in crypto
A recent study found that cryptocurrency crimes have reached an all-time high of $14 billion in value.
According to the “2022 Crypto Crime Report” released by blockchain data firm Chainalysis on Thursday, Jan. 6, that’s nearly double the $7.8 billion stolen by fraudsters in 2020.
This comes amid heated discussions about cryptocurrency regulation, where regulators are keen to preserve the increasing number of small-scale investors flocking towards digital currencies.
With the recent surge in cryptocurrency interest, it’s no surprise that “Olympic-level scammers” have seen new chances for illegal conduct, according to William E. Quigley, a notable investor and co-founder of the WAX blockchain. Quigley claimed that Crypto’s “high-tech” aspect will continue attract smart crooks during an event hosted by Light Node Media.
Consider the recent “Squid Game” scam, in which investors claim that a new SQUID cryptocurrency token and associated immersive online game were nothing more than a con. According to investors, the creators vanished when the currency’s value soared and they seemed to pay out with more than $3 million.
“By absolute numbers, crime is still growing but the ecosystem is becoming safer. Naturally, crime is still growing but the ecosystem is becoming safer. [are] a lot of caveats to that,” said Kim Grauer, Chainalysis’ director of research.
Similar articleCrypto Scams: Protect Yourself With Knowledge| Knowledge is Power: How To Stay Protected From Crypto Scams
The promise of rapid returns by crypto-proponents and the idea that bitcoin could be used to protect against rising inflation have lured newcomers in. Investors remain vulnerable to fraud, even though cryptocurrencies have inconsistent regulations.
The majority of criminal earnings has always come from financial scams, according to the firm’s findings during the last five years. However, the overall economy across all blockchains is growing at an incredible rate, from $2.3 trillion up to $15.8 trillion. This has decreased criminal activity’s importance.
BTC/USD continue to plummet. Source: TradingView
DeFi Transactions Was A Scam
Chainalysis data shows that DeFi transactions increased 912% between 2021 and 2022, according to Chainalysis. Decentralized tokens such as shiba Inu have seen impressive gains which has fuelled a frenzy of DeFi tokens.
There are many red flags when it comes to the immature cryptocurrency economy.
According to Kim Grauer, Chainalysis’ head of research, one issue with DeFi is that many of the new protocols being introduced have coding weaknesses that hackers can exploit. These code vulnerabilities were found in 21 percent of hacking attempts by 2021.
Similar Article|After a one-hour crypto scam, the dangers of DeFi hype surface
The criminals have stolen $3.2 Billion in cryptocurrency, 72% of which was from DeFi protocol hacks.
SEC Chair Gary Gensler told Yahoo Finance in October that DeFi “will end badly” unless investor protections are strengthened.
The Commodities and Futures Trading Commission fined DeFi protocol Poly Market $1.4 million earlier this week for operating a “unregistered binary options market,” and ordered the protocol to “wind down” its operations.
Featured image taken from Unsplash. Charts via TradingView.com