Defi Mining lost investors $ 12 billion in 2021, with fraud and theft cases increasing sevenfold compared to 2020, according to the latest Elliptic report we read on the money news Latest Electronics today.
According to Elliptic, investors have lost $ 12 billion to crime on decentralized financial platforms since the beginning of the year, and over $ 10 billion is being billed for theft, theft, and fraud. In recent years, the total value of DeFi projects has grown from $ 500 million to around $ 250 billion, and with that dramatic increase, there is a risk of being exploited and defrauded.
Since the beginning of the year, fraudulent activity, accounting for $ 10.5 billion in user funds, has been stolen in the event of theft or fraud in decentralized financial products, compared to $ 1.5 billion by 2020. Tom Robinson, Chief Scientist at Elliptic, explains the statistic by the fact that DeFi space has become an area of financial innovation where people are spending huge sums of money, making it an attractive target for malicious actors:
“The DeFi ecosystem is an incredibly exciting, fast-paced space where innovation in the financial services sector is happening at a breakneck pace. This attracts a lot of capital into projects that are not always robust enough or well tested. Criminal actors saw an opportunity to use this. “
DeFi platforms also lack a comprehensive regulatory framework and are trying to address issues in this area, the US SEC released a report on Risks, Regulation, and Remaining Opportunities. Agency commissioner Caroline Crenshaw claims her department has strong authority over DeFi, but no other platforms are registered with the regulator. Ecosystem participants remain unprotected in the event of criminal activities by supervisory authorities and authorities. For example, PolyNetwork is an interoperable protocol that was victim of a hacking attack that stole over $ 600 million.
The platform was dismantled on the Binance Smart Chain when the bad guys moved funds from three previous wallets. However, the hackers are actually white hat hackers, so they wanted to return money from the biggest robbery in Defi’s history. The perpetrators said they did it for fun because they just wanted to expose the weaknesses of these projects. The attacker even returned all of the money and PolyNetwork completely restored its system.