2021 marks the twelfth year since the first cryptocurrencies was publicly launched, and during this time the technology has made significant strides beyond general acceptance. Despite their economic advantages, however, cryptocurrencies are not entirely without security gaps. According to the report, the number of cryptocurrencies will increase by almost 100% by 2021, although crime in this area is also steadily increasing.
The number of cryptocurrencies is expected to increase by almost 100% in 2021
The ease of creating cryptocurrencies has resulted in a huge influx of new coins into the market. By 2021, the number of cryptocurrencies in space reached 8,153 on January 1. That number of 8,153 makes up all of the coins created since Bitcoin entered space over a decade in the previous century. Now that has almost doubled, according to a report released by Finbold which shows that almost half of the money in the crypto market was created and hit the market this year.
The report shows that 8,070 new coins were created in 2021 alone, increasing almost 100% in just one year. In total, there are currently 16,223 cryptocurrencies on the crypto market.
On average, around 21 new cryptocurrencies hit the market every day. The total number of cryptocurrencies in the market hit a new high of 13,000 in October. Then, in the last two months alone, more than 3,000 new coins have come onto the market, which shows the rapid pace with which these new coins are coming onto the market.
That number is expected to continue to rise in 2022 as the emergence of new technologies in the crypto space makes token creation easier. In some cases, it only takes a few minutes for everyone to create and launch their own token.
The number of cryptocurrencies is set to increase by almost 100% in 2021 despite the increase in crypto crime
2021 is a progressive year for the crypto economy. However, it is not without sad stories of cyber hacking and other illegal activities. In particular, the fraud and darknet markets continue to dominate crypto transactions as crime rates tend to rise after a sharp annual decline from 2019 to 2020.
According to a crypto crime report by Chainalysis, the total value of funds received from criminal institutions in 2019 was just over $ 21.4 billion, with scams alone contributing over 80% to this process.
Meanwhile, the total value of funds received from criminal legal entities dropped nearly 55% in 2020, bringing the total amount of illegal funding to around $ 10 billion. In addition, similar to the previous year, frauds dominated – albeit in decline – with around 53.8%, while the darknet market grew to around 35%, compared to 15% in the previous year.
Other major sources of illicit crypto-financing include domestic extremism, terrorist financing, stolen funds, sanctions, and ransomware.
In total, 2.1% of the total crypto trading volume in 2019 and 0.34% in 2020 with $ 2.9 trillion was received from illegal companies. According to Chainalysis, the reason for the strong downward trend is that overall economic activity almost tripled between 2019 and 2020.
In 2021, the downward trend appears to be reversing significantly compared to the same period last year, as the value that criminals receive has increased significantly during this period.
According to Chainalysis’ latest crypto crime report, crypto fraud revenue increased 81% year over year, bringing the total value of cryptocurrencies used in illegal activities to approximately $ 7.7 billion.
By comparison, 2021 is seeing a significant increase in crypto crime rates of 55% in 2020. A major contributing factor to this debacle, according to the Chainalysis report, is the entry of major Ponzi schemes into the cryptocurrency market.
Finiko, a well-known large-scale Ponzi program aimed primarily at Russian-speaking people across Europe, has been identified as a major perpetrator of this illegal activity, raising $ 1.1 billion from victims.
Other important factors contributing to the rise in crypto-crime include the advent of carpet-carpeting, a relatively recent scam, particularly for the DeFi ecosystem. The “carpet of the carpet” is a situation in which victims are forced to invest in a pre-launch token sale that will eventually not appear on the exchange market. In 2021 alone, $ 2.8 billion was lost to carpet tears worldwide.
Ultimately, cryptocurrency remains a major barrier to mainstream adoption of cryptocurrencies, and unless crime rates drop significantly, global adoption could stall.
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