According to the official report of Chainalysis, scams in the market of cryptocurrencies and non-fungible tokens (NFTs) reached a record level in 2021.
The largest number of scams occurred on decentralized (DeFi) financial platforms, which are known for offering users various financial services and investment opportunities on much more favorable terms than financial institutions such as commercial banks, savings banks, investment funds and others.
During 2021, “rug pull” was the most common type of fraud on DeFi platforms, by which cybercriminal groups generated over 7.7 billion dollars. This scam refers to a situation where fake options for investing in a certain project – usually a new token, are promoted on a new or already existing platform. Investors practically trade for a new token in hope that its value will increase, which often happens, but then the people behind the project unexpectedly leave it and disappear with the invested funds, sending the new token’s value to zero.
A similar thing happened with the Turkish cryptocurrencies exchange “Thodex” in April 2021, when its founder closed it and disappeared with users’ funds worth over 2 billion dollars, which is the biggest scam in the last year.
Therefore, the total number of scams in 2021 increased by 82% compared to 2020. Also, the number of digital wallet addresses that were part of the scam fell from just under 10.7 million to 4.1 million, which means that there were fewer individual scam victims, but the average amount of funds taken from each victim increased.
However, it is important to point out that in 2021, the share of illegal activities in the total volume of crypto transactions was only about 0.15%, which is the lowest level ever. On the other hand, total transaction volume surged to up more than 550% from 2020 levels.
All these data are just a confirmation that digital assets are increasingly accepted around the world, as well that the cryptocurrency and NFT markets completely exploded in 2021.
Source: Chainalysis
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