The scale of crimes with cryptocurrencies reached an unprecedented $14 billion in 2021, according to Chainalysis.
Cryptocurrency receipts from addresses associated with illegal activity, including fraud, darknet markets and ransomware, jumped by 80% compared to the previous year. At the same time, such activity accounted for only 0.15% of the total volume of cryptocurrency transactions, which was the lowest value for all time.
The total volume of crypto transactions increased to $15.8 trillion, or five times compared to the previous year. This is due to the sharp increase in demand for digital assets, from bitcoin to non-interchangeable tokens, against the background of their adoption by institutional investors and large companies.
Nevertheless, newcomers are still becoming victims of criminals, and global regulators continue to seek tighter control over the flows of crypto transactions, the report says.
"The abuse of cryptocurrencies with criminal intentions creates huge barriers to further dissemination, increases the likelihood of restrictions by the authorities and, worst of all, makes victims of gullible people all over the world," the authors write.
To a large extent, the rise of the decentralized finance space contributed to the growth of crime with cryptocurrencies. DeFi users lost money both due to fraud and theft, and as a result of errors in code or project management.
In general, the volume of stolen cryptocurrencies increased fivefold over the year to $3.2 billion. Of these, $2.2 billion or 72% is accounted for by the DeFi sector. The volume of fraud in DeFi, for example, the so-called "rug pull", when developers hide with investors' money, amounted to $7.8 billion, an increase of 82% over the year.