Over $12 billion in crypto stolen in the past decade

William S. | December 21, 2021

Since the launch of Bitcoin in 2009, the crypto industry’s technology has advanced significantly. Despite that, many crypto services have failed to build efficient security systems that would stop cybercriminals from exploiting flaws for personal gain at the expense of their victims. Besides, many bad actors have employed a variety of scams.

According to the data presented by the Atlas VPN team, more than $12 billion of crypto assets were stolen in the past 11 years. In addition, 40% of the funds were stolen from fraudulent exchanges, while Decentralized Finance (DeFi)-related hacks continue to surge.

The data is based on Crystal Blockchain Crypto & DeFi Hacks & Scams report 2021. The study collected and analyzed most cryptocurrency-related security breaches and scams over the past 11 years.

The first official security breach of a cryptocurrency exchange happened in 2011, while hackers stole $1 million in total throughout the year. A significant rise in money lost in security compromises occurred in 2014 when the amount spiked to $645 million. Since then, the sum has continued to grow, reaching nearly $3.2 billion in 2021.

On the other hand, crypto-assets stolen through fraud began in 2014, when $11 million were taken away by scammers. Crypto fraud exploded in 2019 when total losses accumulated to $3.8 billion, a 598% increase since 2018. As of now, fraudsters have stolen over $7.1 billion worth of crypto assets in the last 11 years.

DeFi hacks are the latest trend for cryptocurrency cybercriminals. It started in 2020, and hackers stole $149 million of crypto assets from DeFi exchanges. However, losses in DeFi breaches quickly grew in 2021, adding up to $1.7 billion in total, a 1083% increase since the last year.

Fraudulent exchanges caused most losses

Major fraudulent crypto platforms have brought a lot of negative and skeptical attention to the industry. While there are plenty of great cryptocurrency exchanges, there are just as many fraudulent ones, which try to prey on people’s lack of knowledge of how to distinguish a legit crypto platform.

Fraudulent exchanges have stolen 40% of all lost crypto assets throughout 11 years. Fraudulent exchanges are those involved in exit scams, illegal behavior, or whose funds were seized by the government. One of such recent examples is a crypto firm Thodex, which went offline earlier this year, while the company’s CEO ran away with $2 billion of investors’ funds.

Exchanges with very high money laundering risks were responsible for 24% of stolen crypto assets. Such exchanges allow the withdrawal of more than $2000 in crypto daily without KYC/AML (Know Your Customer/Anti-Money Laundering).

P2P exchanges with high money laundering risks have stolen 5% of total funds. Such platforms allow the withdrawal of more than $1000 in crypto daily without KYC/AML procedures. They also attract more people by offering low prices of cryptocurrency listings and ads.

Mixing services were responsible for 4% of stolen crypto assets. Such services mix users’ cryptocurrency funds with others to make them untraceable and hide the original source. Fraudulent platforms for crypto mixing use their customer funds to launder money and eradicate ties to criminal activities.

Other types and unknown entities took away 14% and 8% of all stolen crypto funds, respectively.

With the popularity of cryptocurrencies growing, it's reasonable to say that crypto-related hacks and scams are not disappearing anytime soon. Many people are ignorant of the risks of investing in cryptocurrency because blockchain technology is still relatively new. Before putting money into a platform, make sure to research its technical and security capabilities.

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