Amid the increasing mainstream crypto adoption, crypto-related frauds are also shooting through the roof. According to a recently published report by atlasVPN, Americans have lost upto $956 million, to investment-related crypto crimes this year from Q1 to Q3. This amounts to an unbelievable 277.8 percent hike in investment-related crypto frauds in 2021 as compared to last year. The reason behind this goes back to the stone-age saying, “with great power, comes great responsibility” and especially, since the decentralized industry remains unregulated while offering exceptional returns, the number of victims to crypto crimes also remain on a rise.
“Cybercriminals are using the buzz around cryptocurrencies, NFTs, and the metaverse to trick people into investing in bogus projects that disappear after raising a hefty sum of money…investment-related crimes are on the rise due to countless projects in the crypto, NFT, and metaverse markets. This year, US citizens lost a staggering $956 million to these types of scams, representing a 277.87% growth YoY.”, according the report.
Defi Hacks Frenzy 2021
The crypto industry is categorised into multiple different parts, and so are cybercrimes related to crypto. One of such is the the DeFi hack frenzy which took over the market this year. The latest exploit was suffered by the DeFi protocol, BadgerDAO that lost $120.3 million to the attackers. According to blockchain security firm, PeckShield, the hackers took $117 million in Bitcoin, and the remaining funds were stored in a form of interest-bearing Bitcoin, i.e., a form of tokenised Bitcoin, and Ether — the native token of the Ethereum blockchain. The DeFi platform announced that it will be halting all smart contracts for the time being in order to prevent further withdrawals, without providing any timeline for resumption.
However, unfortunately this is not an isolated incident. The crypto community is being haunted by consistent DeFi hacks in 2021. Recently, the decentralized transaction protocol, BXH alerted its users about the $130 million exploit. Furthermore, earlier this year, the DeFi industry was hit with its largest Defi hack on Poly Network, that resulted in loss of assets worth more than $600 million. While Poly Network got lucky in retrieving all the stolen funds, not all platforms have experienced a sigh of relief this year.