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Report: Crypto crime hits all-time high in 2021

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Report: Crypto crime hits all-time high in 2021
Crypto-related crimes rose to an all-time high in 2021 but haven't outpaced legitimate crypto businesses, according to new data. File Photo by John Angelillo/UPI | License Photo

Jan. 6 (UPI) -- Cryptocurrency crime hit an all-time high in 2021 with illicit addresses receiving $14 billion throughout the year, according to new data from blockchain analytics from Chainanalysis.

The number rose from $7.8 billion the year prior. A spike in theft and scams has resulted in a 79% rise in crypto-related crimes.

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Total transaction volume grew to $15.8 trillion in 2021, a jump of 567% from the year before. Of that, transactions involving illicit addresses made up 0.15% of the total volume.

Scamming was the greatest form of crypto-based crime, followed by theft.

Chainanalysis said that DeFi is one of the most exciting areas of the cryptocurrency ecosystem, but ripe for scamming and theft.

DeFi transaction volume grew 912% in 2021. DeFi is a sector of the crypto market that cuts out middlemen from traditional financial transactions.

Banks and lawyers are replaced by code called a smart contract, which is written on a public blockchain such as ethereum.

The code then executes when the right conditions are met, though experts caution that there are code vulnerabilities in some newly launched protocols that hackers can exploit.

Though cryptocurrency is at an all-time high, legitimate crypto activity is outpacing criminal usage, Chainanalysis said.

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