![]() In a rug pull, which is similar to a pump and dump, some investors will liquidate the entire DeFi pool, leaving the remaining token holders with no liquidity and unable to trade, wiping out the remaining value. Half of all 2020 crypto hacks were of DeFi protocols-a pattern that was virtually negligible in all prior years-and nearly 99% of major fraud volume in the second half of 2020 stemmed from DeFi protocols performing “rug pulls” and other exit scams in a pattern eerily reminiscent of theĢ017 ICO craze. While 2020 did see a large $281 million hack of cryptocurrency exchange KuCoin, the exchange claims to have already recovered 84% of the stolen funds-something almost unheard of in previous years.Īnother factor contributing to this discrepancy is that 2020 was overrun by dozens of DeFi related hacks and scams, which were much smaller in size. While 20 saw a similar number of thefts, hacks, and fraud, the average value taken by criminal actors in 2019 was 160% higher than in 2020, indicating maturity in the crypto space as entities continue to harden systems and take precautions against inside and outside threats. While major fraud volume saw a significant decrease, it still made up 73% of 2020’s crime total. 2020 saw WoToken, a similar scheme operated by some of the same people as PlusToken, defraud investors out of $1.1 billion in its exit scam-58% of 2020’s major crime volume. In 2019, the Ponzi scheme PlusToken netted $2.9 billion with its exit scam- 64% of the year’s major crime volume. ![]() Massive exit scams have dominated cryptocurrency crimes in the last two years. CipherTrace’s 2020 Cryptocurrency Crime and Anti-Money Laundering Report reveals that in 2020, major crypto thefts, hacks, and frauds totaled $1.9 billion-the second-highest annual value in crypto crimes yet recorded. ![]()
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