Over half a billion dollars worth of cryptocurrencies were stolen globally in 2020 - a 38 percent increase. The operators of crypto exchanges are constantly improving their security mechanisms. But the bad guys are also learning.
According to
calculations by the British information portal Trading Platforms UK, the value
of the cyber currency stolen by hackers rose from 370.7 to 513 million US
dollars between 2019 and 2020, which corresponds to an increase of a good 38
percent. The sad climax of the past five years was 2018, when
cryptocurrency worth almost one billion US dollars was stolen.
The Lithuanian
journalist and fintech expert Justinas Baltrusaitis comments on the figures:
"In the past year, cryptocurrency was increasingly noticed by the
mainstream, at the same time this sector was accompanied by multi-million
dollar hacks and thefts."
Fraud on The Blockchain Declined
If you take a look at
the numbers that Baltrusaitis calls, then - similar to the price of Bitcoin and
Co. - a strongly fluctuating picture emerges. Summarizing all other cases
of fraud and embezzlement related to blockchain-based financial products, the
damage decreased from $ 4.4 billion in 2019 to $ 1.3 billion a year later. The
direct theft of cyber money is therefore only a relatively small part of what
is happening.
According to the
experts, the overall falling numbers show the increasing maturity of the
industry and its growing ability to ward off security threats. This now
also includes good contacts with law enforcement authorities.
The interest of hackers
is increasingly shifting from cryptocurrency exchanges and digital wallets to
the DeFi area. DeFi stands for "decentralized financial
services" and describes a financial sector that is based on blockchain
technology and is seen by many experts as serious competition for the existing
banking industry. Typical DeFi applications are, for example, open credit
exchanges in which customers receive loans based on smart contracts or stable coins as financial investments that can be secured with specific tangible
assets.
Open Source Attracts Criminals
Many of these DeFi
solutions rely on open access and open source code, which offers potential
hackers possible points of attack. Also, the start-ups behind new
DeFi products strive for the broadest possible interoperability with other
services to make their business model more attractive to investors. Compared
to the monolithic architecture of traditional banking houses, this makes many
DeFi projects more transparent, but also more vulnerable.
Fraud attempts under
the guise of Covid 19 also reached significant proportions: Fraudsters posed as
celebrities and collected crypto donations - which then disappeared
undetectably. A scam seems almost bizarre, in which unknown perpetrators
broke into the official Twitter accounts of celebrities such as Barack Obama,
Joe Biden or Elon Musk in mid-July 2020 and promised every cryptocurrency worth
$ 2,000 in their name to the previously sent cyber money worth 1,000 euros.
Baltrusaitis explains
the sharp decline in the volume of blockchain fraud between 2019 and 2020 with
the increasing pressure of persecution on the part of the authorities who
implemented laws against money laundering. A proposal by the US financial
supervisory authority from December 2020 stipulates that both sender and the recipient must be known for transactions via crypto file exchanges in the
future - which would be a hard chunk to swallow for many fans of Bitcoin and
Co.
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